Carriage Services Inc (CSV) 2006 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Carriage Services first quarter earnings conference call.

[OPERATOR INSTRUCTIONS]

I would like to turn conference over to Mr. Ken Dennard of DRG&E.

Thank you, [Rose], and good morning, everyone.

We appreciate you joining us today for the Carriage Services conference call to review 2006 first quarter results.

Before I turn the call over to management, I have the normal housekeeping details to run through.

If you would like to be on the e-mail distribution list for future Carriage Services news releases, or if you had a technical problem and didn't receive your copy of the news release yesterday afternoon, call our offices at DRG&E, and that number is 713-529-6600, and we will be glad to help you out there.

Also, if you would like to listen to a replay of today's call, it will be available via website by going to Carriage's website at www.carriageservices.com. Additionally, in a few hours, there will be a telephonic instant replay made available for the next seven days, and that replay access number and passcode are in the earnings release.

Please note that information reported on this call speaks only as of today, May 9, 2006, and, therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening.

Also, as you know certain statements made today in the conference call or else whereby, 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 Act of 1934 as amended. These statements are based on assumptions that the Company believes are reasonable. However, many factors that are discussed under forward-looking statements and cautionary statements in the Company's Annual Report on 10-K for the year ended September 31, 2005, and in subsequent SEC filings that could cause the Company's results in the future to differ materially from the forward-looking statements made today or other documents or oral presentations made by or on behalf of the Company.

A copy of the Company's Forms 10-K, Forms 10-Q, and other information and news releases are readily available on Carriage's website.

Now, with me today is Mel Payne, Carriage Services Chairman and Chief Executive Officer, and Joe Saporito, Carriage's Chief Financial Officer.

I would like to now turn the call over to Mel.

Thank you, Ken.

We were very satisfied with our first-quarter results, especially because last year's first quarter was the best quarter we had had in years. Everything seemed to be clicking last year, and for that reason, we knew this year would be a tough comparison. So, we were -- we were actually very satisfied.

As far as results, the funeral operations were in-line with our expectations considering that our funeral volumes declined about 3.4% because of the weak flu season this year compared to last year. Particularly, last year, in February and March, we had strong death rate because of the flu season.

In looking at our location business -- by location, we review, quarterly, our market share, and our quarterly market share analysis indicates that the funeral volume decline was primarily related to death rates, not market share loss, and the death rates were the weakest in the Northeast and the Midwest.

Our cemetery performance was weak, but the weakness was highly concentrated in a couple of properties, including our largest property in Northern California, which alone accounted for an earnings decline of $0.02 a share. We are very confident, based on actions we are taking there, that we will see a turn-around in that business in the second half of this year.

We also completed, in the first quarter, a portfolio strategic assessment. Now that we are back in the market for acquisitions, we have criteria that are also being used to look at our existing portfolio.

We wanted to look at the long-term market share performance potential and financial performance potential of each property. We used a number of criteria, but, in particular, I wanted to mention three -- size of the business; the size of the market; and the proximity to and synergy with other operating businesses. These were some of the considerations. Of course, demographics was another one.

Accordingly, after reviewing our portfolio, we have agreed to sell two businesses that don't fit within our long-term plans, and these are in smaller markets. This would also entail getting out of this particular state.

We expect the transaction to close in the second quarter. As one of these was bought at the peak of the market in 1998, we are writing down its book value to the fair market value based on the sales price, and we do expect a closing in the second quarter.

As we begin to make acquisitions and to selectively dispose of nonstrategic properties -- and I don't mean there will be a lot of those, but there could be some -- one goal is to modify the profile of our portfolio over the next five years -- particularly over the next three -- toward larger businesses in growing suburban markets so that we can achieve positive year-over-year same-store volume growth without relying on an increase in death rates.

The acquisition environment has markedly improved since the beginning of this year. As I am sure all of you know, CSI agreed to acquire Alderwoods, and we have seen, since the beginning of the year, more independents that fit our criteria larger and in good markets that appear interested in discussing their succession plans for the right reasons. While we can't predict the timing and amount of acquisition activity at this point, we are highly confident that we will be able to achieve or exceed our five-year goal, which we established at the beginning of 2005, requiring 25 million and 9 to 10 million of EBITDA out of free cash flow.

With that, I would like to turn it over to Joe.

Thanks, Mel.

Good morning, everyone.

We reported revenues from continuing operations of 41.7 million and EBITDA from continuing operations of 9.9 million for the first quarter. Excluding impairment charges, adjusted EBITDA was 10.8 million, compared to 11.5 million in the first quarter of 2005, and adjusted diluted earnings per share was $0.15 in 2005, compared to $0.13 in the current quarter.

Lower volumes and higher operating costs in the funeral operations and higher bad-debt expense in the cemetery operations contributed to lower profitability in margin. We believe our operational reorganization at the beginning of the year should result in a rebound in our margin and continued revenue growth over the remainder of the year.

As Mel said, during the first quarter, we decided to sell two businesses, both of which were in small markets not strategic to our future plans. We have recorded an after-tax impairment charge totaling 3.25 million, or $0.17 per diluted share, to write-down the current book value of assets to fair market value.

In addition, we decided not to renew a building lease for a small business -- for a business in a small community in Northern California. As a result of exiting this business, we recognized an after-tax goodwill impairment charge of $890,000, or $0.05 per diluted share.

Free cash flow was essentially break-even for the first quarter 2006, compared to $300,000 in adjusted free cash flow for the first quarter of 2005. The first quarter free cash flow is impacted by the semi-annual interest payments, and that totals about 5.1 million on our senior notes, and payment of our annual incentive bonuses. Cash and short-term investments totalled 24.4 million at March 31, 2006, compared to 24.9 million at December 31, 2005.

Turning now to our funeral operations, our same-store funeral contracts decreased by 3.4%, primarily due to lower death rate and a weaker flu season. Same-store funeral revenues increased slightly by 0.4% because our average revenue per contract increased 4%.

During the quarter, the average revenue for cremation contracts increased 10% to $2,634, and burial contracts increased 3.8% to $6,947. The cremation rate increased 50 basis points from 32.8% to 33.3%. Funeral gross margin decreased approximately $400,000, or 170 basis points, because operating costs, primarily salaries and healthcare costs, increased.

Our cemetery revenues from continuing operations increased 3.2% from 9.7 million to 10.1 million. However, internments decreased approximately 2% in the first quarter, and financial revenues decreased approximately 4.5%, but we recognized revenue of approximately $500,000 related to the completion of a mausoleum.

Cemetery gross profit decreased from 2.2 million in 2005, to 1.6 million in 2006, and gross margin decreased 620 basis points from 22.6% to 16.4% because operating costs, primarily bad-debt expenses, were higher.

We would also like to re-affirm our previous 2006 annual outlook, which is intended to estimate results from continuing operations based upon same-store volumes. I would like to remind you that the outlook excludes the effect of asset dispositions and acquisition of businesses that may or may not occur this year. We have republished the key assumptions in the 2006 annual outlook in our first quarter press release.

Thank you, Joe.

Finally, I would just like to say that we firmly believe the improved tone in the acquisition market is simply the beginning of a cycle of renewed consolidation based on family-specific fundamental reasons, where the sale of our motivations relate to succession in financial planning. In other words, we think this cycle, as it relates to independents, will have some economic sanity to it as compared to the cycle in the late-1990s. And as the cycle unfolds, we believe we are well-positioned -- in fact, uniquely positioned -- to financially and organizationally benefit through this new cycle as we have the systems and the infrastructure that can be leveraged.

We will be patient, selective, and disciplined as to our criteria because we plan to create the maximum amount of shareholder value possible over the next few years.

With that, I would like to open it up for questions.

Thank you.

[OPERATOR INSTRUCTIONS]

Our first question comes from Bill Burns from Johnson Rice.

Please go ahead.

Okay.

The -- the SCI Alderwoods buy-out -- Mel, do you think you can come across some opportunities to maybe pick some properties up below market value, or at very attractive prices, let's say?

Well, it is early right now, Bill, but we know they are working hard, and nobody really knows what -- what they'll have to sell at this point. But I am sure that we will have an opportunity, as others will, to bid on some properties. I think Service Corp. did a good deal there, from what I can tell, as far as what they paid. We certainly don't expect to be paying any multiples that aren't highly accretive.

And financing with the cash on-hand and money in the bank--?

That will depend on--.

Letters of credit?

Right. It would depend on how big the opportunity is, but we are -- we are building cash both from operations, and we have this one disposition that will add to our cash position, and so, I think by the end of the year -- and I don't know when the Service Corp acquisition will close, but they are saying before year-end -- so, I think we can finance a big chunk of -- of whatever we do bid on and get, out of cash. If it's bigger than that, we have plenty of financing capability.

Alright.

Thanks.

You bet.

Thank you.

Our next question comes from James Clement from Sidoti & Company.

Please go ahead.

Good morning, gentlemen.

Hi, Jamie.

If I can just ask two questions -- one about strategy; and the second about operations.

In the press release today, and in your prepared remarks, you talk about the desire to acquire larger -- larger businesses, and other public companies over the last year or two have basically said pricing for those kind of deals, really, is still not all that attractive. I am wondering if consolidation among two of the larger players in this industry -- how much of that has made you feel a little bit better of being able to come out and say that you guys -- you all think you can find larger businesses?

Well, we were already seeing some activity. It is like I said in my -- my remarks.

We are in 28 states, I believe, and we don't need to focus in 28 states. There are a number of places where we have concentrations. We said this before. We want to go where we already are, and we have a reputation because what we find, Jamie, is reputation and how you operate and in the area means a lot in terms of somebody wanting to join your -- your company. And so, we have great reputations. We are reconcentrated with bigger businesses in growing markets. That's where we will look first, given our size, we don't have to acquire a whole lot of businesses for it to make a material difference.

So, I've heard some of the -- some of the other companies' comments over the last couple of years, and I think all of that was true, although we knew this new cycle would get off to a slow start. I do think the -- the announcement by Service Corp gave a lot of people pause, perhaps thinking that maybe Service Corp, and even Alderwoods would be a candidate for bidding on a business, and I don't think -- I don't think that will be anything that Service Corp will do near-term.

So, I think puts us in a good spot to continue to focus on independents -- and I mean larger ones -- and I don't think the prices are going to be out of the realm of reason, although we don't have one signed either. And then, I think we -- we certainly will look hard at the -- at the SCI offerings if that's put on the market. It looks like it will be, and I think we will be able to come out of that with some bigger businesses in some growing markets that -- that allow us to execute what I call a portfolio profile modification over the next few years, and I am very confident of it.

Okay.

And -- Mel, if I could just follow-up with a question just about operations.

Can you talk a little bit about the standards model that you brought to the cemetery business. I know that's -- it is a smaller piece than the funeral homes. Can you talk about the differences between the standards model you brought to the funeral homes versus the model that you brought to the cemeteries. And also, can you give us a sense -- if I can borrow a baseball analogy, if it is a nine-inning game, what inning are you in in terms of the cemetery operations in terms of getting these operations implemented -- getting these standards implemented?

The cemetery side, of course, we pushed out the standards model in '04, on the funeral side, and we have had two years now, and the first two years were very interesting. It just takes time for people to understand the dynamics of nine different standards and being able to make compromises on this standard versus another, all intended to grow the business profitably.

On the cemetery side, as opposed to the funeral side where it is growing your funeral volumes, it is selling -- it is selling property in your cemeteries because if you can sell the property to new families, you are going to be able to sell other products and services.

So it took us a while. There are a lot of moving parts, but the -- the standards on the cemetery side -- and there are ten of them -- fall into the same three major categories -- market share; growth in units; people, not only people as a percent of revenue in different categories and things like that, but also, the quality of the staff; and continuous upgrading of the staff.

These two standards are where we've been doing most of the work, making that less subjective, more objective, more related to performance that can be measured by staff member whether they are a sales counselor, admin person, or whatever, and then, you have the operating and financial metrics that measure the profitability of the various categories of your cemetery.

We do have a bit of a disadvantage on the cemetery side in that our portfolio is a lot smaller. So, on the funeral side, whereas we had four groupings by size, and we took the best of the best in each grouping and developed the standards for that group, it was a little more difficult on the cemetery side, and that's why we were delayed in moving those standards out.

We also did not have the systems in place to -- to give us the operating data and metrics to measure standards performance. That is also been accomplished with our HMIS roll-out at the end of last year.

I am very confident that by 2007, we should be getting some tractions with these standards, but I can tell you, Jamie, once you get these standards in place, then it becomes a very transparent issue of do you have the right operating leadership.

Okay.

And that's where we are focused. We have had some weakness there. It is just so interesting when you move from the budget model to the standards model, how apparent that becomes. So, that's where we are spending our time.

Very good.

Thanks a lot for the time.

You bet.

Thank you.

[OPERATOR INSTRUCTIONS]

Our next question from Mike Scarangello from Merrill Lynch.

Please go ahead.

Hi. Good morning, guys.

Hi. Good morning, Mike.

I just had two quick ones.

Mel, I was wondering on the cemetery margin improvement initiative, are there any costs that you have already permanently taken out of the business that we maybe should be proforming out of the current results? Is it just a matter of time before we see them in the numbers, or is this really a gradual process?

You mean to get the margins back up?

Yes, in other words, is there something you have done already that permanently took a couple million bucks out, and we are just waiting for it to show up in the numbers?

Took a couple million dollars out of our costs--?

Yes. So, is it staff reduction or--?

On the cemetery side--?

Yes.

Recontracting any vendors, or anything that you have already done that we can give you credit for?

No, I think, on the cemetery side, the drop we had in the first quarter, like I said, we had two places out of 20-something that counted for all of the performance decline plus some.

Right.

We had one place, alone, like I said, in Northern California -- and this place has just been steady as she goes for years -- and it just hit the wall. We know why. It cost us $0.02 a share, which is the total gross profit decline of $600,000 year-over-year.

Now, it was a combination of sales leadership and strategy that changed last year in the wrong direction, and we began to see the impact of that, especially in the first quarter, but we saw hints of it in the fourth quarter. We changed the leadership out West in terms of the reorganization at the end of last year.

So I expect to see a turn-around in that business, but the performance decline was due to weak property sales and the sales that we had, created more of a need for bad -- bad debt reserves. So -- that's something we can turn-around in a pretty short order, and it doesn't have to do with staff reduction, it has to do with sales leadership, operating leadership, having your hand on the business, and having -- having execution at the operating level.

Can you just follow-up on the bad debt portion -- why did that necessarily go up?

The business we put on the books had low-profit in it and didn't stick. Toward the end of last year, and this is a high -- a high-revenue place, it probably accounts for 30% our total revenue in our cemetery portfolio.

We had some new leadership out there that didn't get their hands around it, so we are all over that.

Okay.

I had a follow-up question on the -- on the acquisition topic, and as it might relate to leverage going forward.

I think we heard from you in the past that there is really no reason why leverage should increase as a result of your acquisition program. In fact, it might be an opportunity for leverage to decrease.

I know now there is some unique opportunities with Service Corp. You are talking about maybe borrowing money if things roll out a certain way. Do you still stick out toward your guns there about not increasing leverage, or should we assume if unique things present themselves, that you might have to stray from that parameter?

I think we want to -- you never know how thing are going to scheduled out, and we had a five-year plan to used $67 million of free cash flow and our cash balances that would build up to buy good businesses, revenue and EBITDA, while we improve our existing portfolio, all the while, not increasing our total absolute debt. Therefore, our debt ratios would come down over the next five years with the Alderwoods acquisition, by Service Corp, and, at least, the possibility of a package acquisition. That plan could have a -- could have a wrinkle in it, but the plan is still our plan.

The good news is I think our cash is building faster than we anticipated. We certainly expect to have 35 or $40 million in cash by the end of this year. Again, I don't know what the timing would be on this opportunity, but say it is year-end, if we had to dip into some financing -- debt financing -- to complement an acquisition, we would consider that, but if -- if it included some businesses that we had to take along with some mostly good ones, we would turn around and sell some of that off.

We don't expect this to lead to any adverse leverage consequences. On the contrary, we want to use an opportunity, if it presents itself, to -- to improve our -- our leverage ratios, and we think we can do that in short order.

So does that mean we shouldn't rule out a leverage increase, but--?

It would be temporary.

It would be short-lived.

And I don't think ratios would increase. I think the dollars would increase, but not ratios.

But not leverage--?

Yes.

Okay. Alright.

That's very helpful. Thanks.

Thank you.

Our next question comes from Sunya Ribochristoff from ING Clarion Capital.

Hi, guys.

Thanks.

I am a little late to the call, but a few questions here.

First, regarding your bad-debt, so you are saying that the location that led to the increase in bad-debt, that is the same location where you had the hit to cemetery gross profit?

Yes.

And that's a Northern California location?

That's correct.

So, with that, you are saying that -- is this a bad-debt reserve run rate now that we should be expecting going forward, or do you think that this has been ameliorated?

Yes, this is just pure operation.

You get loosey-goosey on your sales team, and you have people making some bad sales for the wrong reasons for three or four months, and in a business that basically is much larger than any of our other cemetery operations, it is makes what looks like a -- a company-wide impact, but that impact is very short-term and very local.

We know, and have already taken corrective action, just might take a little while for that to show up in our numbers, but we do expect the second half to -- to turn -- turn back up.

I've always said you can not run a -- a portfolio of individual businesses around the country based on consolidated numbers. This is a business where you have to look at each individual operation. In this particular one, it happens to dominate our cemetery group. That's good news and bad news.

It means when we have a blip -- it hurts. It also means if we apply the right fix, you can turn it around in short-order, and that's exactly what we are doing.

So, just to make it clear, the year-over-year decrease in gross profits, that is almost completely attributable then to--?

The one location.

The one location -- got it.

If it has to do with some individuals or some salespeople there, are they being retrained? Or were they terminated, or--?

The sales strategy and execution, including the people, are -- are -- have been assessed and are being trained. You bet. In some -- some criteria that we didn't have are in-place based on what is a quality sale, both from a profit and a credit point of view.

We -- as I pointed out, we have reorganized operations at the end of last year, and the person now in charge of our Western portfolio is all over this. His background is in cemetery and sales operation, so I don't think this will be a lingering problem and not one we are really that worried about.

Okay.

Now, switching to more strategy in-line with the theme of M&A going on in your space. Would you or have you been in discussions about other strategic players here in the space regarding outright acquisition at all, or--?

You mean acquisition of our company?

Yes.

We've had that question. Any time you have the top two companies in an industry come together, there's -- there's a question are we going to have other consolidation of consolidators. The only other -- there are several others out there, the largest of which is Stewart Enterprises in New Orleans.

All I can tell that you we have no interest in selling our company. We have worked really hard to get positioned the way we are for this next cycle, and we think we would be selling away a lot of upside, counting on somebody else's strategies and not our own, and we are very confident about what we are doing, how we are doing it, and where we are going. So, that's not in the cards.

Okay.

And regarding, just talking about leveraged levels -- you said it would be, basically, to make it clear, it would be maybe over a quarter, for example, of drawing down in your credit facility, perhaps, and using cash off the balance sheet to fund a relative sized acquisition, and then, maybe over the next two or three quarters, paying that debt down immediately.

That's correct.

So, that's what you are saying In terms of your leverage ratios, you don't see them meaningfully moving up, at least on a LTM basis, but, of course, on a quarterly basis, for coverage, it is possible that they could get hit?

Yes, it will be short-term, and we are very cognizant that -- we went through a period of reconstruction like the rest of the sector where we are we had over-leverage. The problem is we did not have enough free cash flow to support the leverage, so everybody started selling assets. We are very cognizant we do not want a repeat over-leverage, but we don't want to miss an unusual opportunity because the timing.

We are also very cognizant that the equity markets are not valuing our stock very much here based on the free cash flow that we see both existing and what we might do in terms of acquisitions. So, we don't want to give the equity markets, or the credit markets, a reason to be negative. We will be very careful.

Absolutely.

So do you have procure then, in terms of what kind of EBITDA you'd be seeking to buy in potential acquisitions?

Well, we will apply the criteria that we've developed based on the standards that we talk about both on the funeral and cemetery side. These standards are great as a framework to look at acquisitions, and again, it relates to size of the business, the size of the market, the competitive standing within that particular market, the demographics.

If we can -- if we can get those things right, we know what we can do as far as managing these things to a certain level of earning power. The good news about where we are is that I think the infrastructure of the Company, both from a systems point of view, as well as an organizational point of view, and I think, a financing point of view in the amount we would be talking about here, is sort of in a sweet spot. We can acquire here and leverage the infrastructure to I think to a very accretive degree, and that's what we -- that's what we would intend to do.

And would you seek to acquire to grow, or would you seek to stay -- like tuck-in acquisitions within your current geographies, or in your line of thinking, would you seek to, basically, buy geography?

We know which geographies we want to be in at this point. We are not looking to add a lot of new geographies, although I would, tell you that if we looked at a package and there was an opportunity to get into a -- one of what we have identified as a "long-term strategic market," bigger-growing -- we would look hard at that.

On the other hand, we wouldn't -- just because we do a transaction here that might be a one-timer, we wouldn't consider not continuing to grow over the next five years through purchasing of top-notch independents.

We think the cycle is going to last another -- we don't know how long it will last, but consolidation will not stop in the industry just because of -- just because of this transaction between Service Corp and Alderwoods.

Finally, how often do you meet with the rating agencies? Do you have an annual meeting or dialogue with them?

We talk to the rating agencies probably quarterly and update them on what we are doing. So that's pretty much a standard -- standard operating process for us.

Great.

Well, thank you very much.

Thank you.

[OPERATOR INSTRUCTIONS]

Our next question comes from Mark Cooper from Wells Capital Management.

Thanks.

Good morning, Mel.

Good morning.

You made a comment earlier about the -- you are disappointed -- or didn't think the equity markets were following your stock properly, and the way -- the way that I calculated, at least on the forecast, not -- certainly not what you've delivered at this point, but on the forecast, is about a 5% free cash flow yield, and I am curious what you think is the more appropriate valuation?

Alright.

I don't know what numbers you are using, Mark, but the numbers we are using is a 11 to 12.2 free cash flow.

So, if your forecast for 2006 in here, says you expect free cash flow in the range of $12 million?

Yes, I think our range is 11 to 12.2. That is about $0.59, $0.60 a share.

Right.

And you have total debt outstanding of how much?

We have senior debt outstanding of $142 million.

Right, so -- and maybe is the part that disturbs me a little bit -- that's part of the value of the firm, so you would certainly have to take the -- the debt plus the equity, and divide it by the free cash flow, and I get about a 5% yield if you're telling me--?

That's not how we -- not how we look at it. We look at the free cash flow per share, which is after all that interest on all that debt. That's after -- after everything, and if it is $0.60 a share -- I thought the way you calculate free cash flow was you use $0.60 a share and divided it by the price of the stock.

Well, the only -- the only thing that is problematic about that, Mel, and makes me -- makes me wonder about how you value your acquisitions.

If I own a house, and the house is worth $100,000, and I have a $90,000 mortgage on it, my equity is worth 10. My equity is not worth the 100,000.

What -- what is the asset throwing off in terms of free cash flow, after debt service?

After debt service -- okay, so you are assuming that debt is permanent structure here on this company and never has to be repaid. All I am saying is that I think if you -- if you line up all the public companies, you are going to find that the equity is being accorded a pretty high valuation given what has happened so far, and I think that's how you would end up pricing your acquisitions, or maybe because you are not considering that, that's why you ended up in the past over-paying for things.

Well, you may have a good point, although I can tell you, in the past -- way back in the past, we haven't over-paid for anything in the last six years.

Well -- we don't intend to overpay for anything going forward.

Well, I understand the intention, but I'm just -- I am growing a little bit concerned that -- that I -- I understand that the focus -- the only way that the Company is going to grow significantly is going to be by acquisition, and I just hope there is some discipline in terms of pricing, and I am trying to understand how you view -- view pricing, and I believe that debt service is not just the incremental interest cost on the debt, it is ultimately paying off that debt because those bond holders, as we have all learned in the last few years, own the call option on the equity of the Company.

No, we don't disagree -- I mean, we can't overpay and increase any shareholder value.

That is exactly right.

And I do worry that this acquisition announced by SCI creates a bit of euphoria in the sellers' minds of other properties that may create some disposition opportunities between those two companies, but I would just continue to urge -- urge a very sharp pencil on these things.

After six years of working hard to pay down the debt, it is a real sharp pencil, and we -- we are not going to lose that discipline.

But I appreciate your -- your input very much.

Thank you.

Thank you.

And, Mr. Payne, no further audio questions at this time.

Please continue.

We appreciate everybody's interest in the Company, and your comments are well taken.

We think we are in a good position here, but we will be disciplined, and we have worked too hard to get where we are, and we are not going to mess it up now. So stay tuned.

Thank you very much.

Thank you.

Ladies and gentlemen, that concludes the Carriage Services first quarter earnings.