Carriage Services Inc (CSV) 2010 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Carriage Services second-quarter earnings conference call. (Operator Instructions). This conference is being recorded today, Thursday, August 5, 2010. I would now like to turn the conference over to Mr. Kip Rupp with DRG&E. Please go ahead.

Thank you and good morning, everyone. We appreciate you joining us for Carriage Services' conference call to discuss second quarter of 2010 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 releases or if you had any technical difficulties and didn't receive your copy of the release yesterday afternoon, please call our offices at DRG&E. And that number is 713-529-6600.

Also, Carriage Services has posted supplemental financial tables and information on its website. It can be found by going to www.CarriageServices.com regarding its recent financial results. The Company encourages you to review that information at your convenience. If you'd like to listen to replay of today's call, one will be available via webcast by going to Carriage's website.

Additionally, in a few hours there will be a telephonic instant replay of this call. It will be available 24 hours a day for the next seven days. The replay number and access for the call are found in the news release distributed yesterday.

Please note that information reported on this call speaks only as of today, August 5, 2010, and therefore you are advised that any time-sensitive information may not be accurate as of the time of any replay listening. Also, certain statements made today on the conference call 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 23-21E of the Securities Act of 1934, as amended.

Statements made on this call today by management are based upon assumptions 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 Form 10-K for the year ended December 31, 2009, and all subsequent SEC filings, could cause the Company's results in the future to differ materially from those forward-looking statements made today and/or in other documents or oral presentations made on behalf of the Company. A copy of the Company's Form 10-K and thank you, news releases and other information are available for free on the Carriage Services website.

And now I would like to turn the call over to Mel Payne, Chairman and Chief Executive Officer. Mel?

Thank you, Kip. Terry Sanford and I will be your host on this call today as Jay Dodds, our CEO, is out of the country on a previously scheduled trip and will be back on our third-quarter conference call.

Terry, why don't you cover the operating and financial results first?

Thank you, Mel, and good morning, everyone. We provide a great deal of transparency and data regarding our quarterly and annual results in our press release and the supplementary information that we make available in the investors section on our website. So rather than go through the various detailed financial and operating metrics, my remarks today will focus more on various highlights of our most recent results and other key financial data points. I will refer you to our press release for the detail of the financial results for the second quarter of 2010.

We are pretty pleased with the financial results we achieved in the second quarter of 2010, which were slightly ahead of our external and internal expectations. And we closed on some really good acquisitions during this period.

Now, looking back to last year, you may recall that the second quarter of 2009 was a record quarter for our cemetery pre-need property sales. And that had a very significant and positive impact on our results in that quarter. So we've had some tough comparisons for our Cemetery Operations compared to last year, and our Cemetery Operations did not quite match the results from our 2009 second quarter.

But despite that tough comparison, Carriage generated net income that was 13% higher than the year ago quarter, diluted earnings per share of $0.13 compared to diluted earnings per share of $0.12 in the same quarter last year, an 8% increase, and a 50% increase in free cash flow, which financed the majority of the cost of the acquisitions that we closed the second quarter. Year-to-date, and maybe more importantly than just focusing on a three-month period, we've earned $0.29 per share compared to $0.25 last year, an increase of 16%.

Our total revenue in the second quarter of 2010 was essentially flat compared to the same quarter last year. Starting with funeral revenues, our total federal revenues were up slightly as volumes increased by 13 contracts and the average revenue per contract increased 1.8%. Our same-store Funeral Home Operations experienced a minor 1.2% decline in contract volume, but were helped by continued increases in our average revenue per funeral service. Revenues from companies we acquired during the preceding four quarters provided the source of the increase in total funeral revenue.

Our total cremation rate in the second quarter of 2010 was 42.9% as compared to 41.8% in the same quarter last year. We continue to work on increasing the percentage of cremation contracts away from direct cremations and toward cremations with services. For 2009, the percentage of cremations with services for Carriage was 45.3%. For the first six months of 2010, the percent of cremations with services for Carriage improved to 46.4%. That has helped to drive a 5.4% year-to-date increase in our average revenue per cremation contract.

Now this is important because of the fixed nature of our business. Modest increases in cremation services provided can result in meaningful increases in the Funeral segment EBITDA margin. We believe significant opportunities continue to remain for us to increase the percentage of cremations with services over time.

Moving to our Cemetery segment, our total cemetery revenue was down 10.8% in the quarter, largely due to the tough comparison in the record results in the same quarter last year. And as we all know, we are in very difficult economic times. Year to date, we have experienced consistent stable revenues month after month, and we have maintained a relatively high and stable number of cemetery sales counselors.

Now, Carriage is primarily a funeral home company by number of locations and revenue. As such, historically, we have been challenged with attractive high-quality cemetery personnel. However, over the last two years, we have been able to attract increasingly better cemetery sales and operational personnel. Looking forward, we expect that full year 2010 cemetery revenues will approximate the full year 2009 cemetery revenues because of particular large contracts for products such as private family mausoleums and dedicated gardens that are either in process or expected later, and which were absent in the first half of 2010.

The biggest incremental contributor to our total revenues in the second quarter of 2010 was the superior revenue performance of our trust funds. Total financial revenue increased 44.2% on a year-over-year basis, due to the favorable performance we experienced from the trust portfolio repositioning we undertook, beginning well over a year ago. As a side note to our repositioning efforts, we shifted a significant portion of our equities into nice yielding corporate fixed income securities in early Q2. It is important to note that we do not believe the amount of our trust income is a one-time event but that our portfolio will continue to have a positive impact on our revenue growth, margins and earnings over time, primarily because of the fixed income investments which were throwing off much higher income or, saying that another way, compounding in our pre-need accounts at yields we haven't experienced historically.

Now, for that reason, we began at the beginning of 2010 by presenting our financial income in a separate section of our revenue on our income statement and our trend reports on the website. We believe that the earnings growth profile of our trust portfolios and their ability to consistently and favorably impact our financial results, continuing into the future, is unique to Carriage as compared to many companies.

As you can see from our financial results, the revenue side of our business as a whole was stable as compared to the same quarter last year. Our successful expense containment efforts, both in the field and at corporate, has also enabled us to generate moderate EBITDA and earnings growth in the quarter as compared to the same quarter last year, and also resulted in higher margins.

During the second quarter of this year, we repurchased approximately $800,000 par value of our TIDES convertible preferred securities for approximately $500,000 in the open market, which was an effective yield of approximately 12%. We will continue to be opportunistic in repurchasing our TIDES securities in the open market, or through private transactions, but only when attractive opportunities present themselves going forward.

By comparison, the gain on this transaction was roughly equal to the gain on the sale of some excess real estate in the year ago quarter. So by itself, the gain on the repurchase of the TIDES was not a reason for the increase in earnings per share.

In summary, our financial and operating results both this quarter and year-to-date continue to demonstrate Carriage's ability to consistently improve its financial results and operational success, despite continuing challenging economic conditions and, as we understand, lower death rates.! For a number of quarters, we have discussed different operational focus areas and other strategies that were aimed at improving not only our financial results, but also to generate greater stability and consistency over the long term -- such as our trust fund portfolio repositioning.

Because of the nature of our business, [in] long term is what's most meaningful to us. We continue to deliver on these goals and continue to expect consistent financial improvement going forward. As mentioned in the second-quarter earnings release we put out yesterday, we have revised our 12-month rolling forward outlook upward to reflect the positive anticipated impact of the acquisitions we have completed this quarter.

These acquisitions were all cash deals and our free cash flow provided the source for most of the cash. At quarter end, we owed only $3.2 million on our bank credit facility. Based on our knowledge of these acquired businesses and conservative estimates of integrating these businesses into Carriage, we have revised upwards our diluted EPS forecast by $0.05 for the next four quarters.

Now at that, I will turn the call back to Mel to provide some color on our acquisition efforts in the industry landscape and his concluding comments.

Thank you, Terry. In preparing for this call, I backed away as I often do from the quarterly results, and had a few interesting and, hopefully, helpful observations in our last six months -- even longer if you want to go back -- have been trending and how these relate to our business strategies, and how these strategies as they're executed will be impacting our longer-term trends and outlook.

First, as we are in a high fixed cost local business with strong operating leverage related to volumes, our strategy is to build a portfolio of quality death care operating businesses in 10 to 15 demographically strong strategic markets over the next five years. This should position Carriage to benefit from rising baby boomer death rates at some point.

However, the industry continues to experience a prolonged period of generally weaker death rates, compared to the longer past as advances in medicine continue to extend longevity. Therefore, since waiting for death rates to rise is not a plan, it is critical that we maintain market share in our local markets.

I am very pleased to report that, in looking back over the last six months, our same-store funeral contracts were only down 48 contracts or 0.5% to 10,162, and our same-store cemetery interments were actually up by 43 interments or 1% to 4,494. Based on what we hear about the general industry experience during this period, this is an outstanding performance and the basis for continuing modest same-store revenue growth.

We are extremely proud of our managing partners for this performance and their ability with their employee teams to execute our operating model and to create a consistent level of client family value, as well as customer loyalty for our businesses across the country

Secondly, our funeral business strategy has always focused on maintaining and growing funeral marketshare, primarily through our standards model framework and entrepreneurial local leadership, complemented by market by market selective but not broadly aggressive pre-need strategy, pre-need sales strategy. Because of this business strategy, our total funeral contracts have historically averaged about 80% at need and 20% pre-need, thereby maintaining pricing power on 80% of our business and relying on investment returns and insurance policy growth on 20% of our business.

As the years passed, the disparity on the average revenue between our at-need and pre-need funeral contracts widened. And our pre-need funeral discounts became increasingly bigger revenue loss issue, as our investment returns and insurance growth were not -- they were sufficient to offset inflationary costs, but they could not match the qualitative increases in our at-need funeral averages. As we now seem to be in a prolonged disinflationary period, we have a great opportunity to close this revenue gap and improve our margins.

As Terry mentioned, we had a very successful trust fund repositioning strategy executed over the last 21 months. And what we've noticed is the gap between our at-need and pre-need funeral contracts has begun to shrink. We are beginning to see gradual monthly increases in pre-need funeral averages, which should continue and likely accelerate over the next several years as we continue to harvest equity gains but, more importantly, the large income compounds over time.

We believe this is the beginning of a multiyear closing of this revenue gap, which will have the effect of modestly increasing our funeral revenue averages, our funeral field EBITDA, and our funeral field EBITDA margins.

In summary, these two critical long-term performance drivers, i.e., stable volumes and increased revenue averages from the contribution from our trust funds and great service delivery, led to an increase in our all our key margin metrics for the second quarter as funeral field EBITDA margin increased to 30 basis points, cemetery field EBITDA margin 200 basis points, and consolidated EBITDA margin 40 basis points.

As we now begin to look out over the next five years to grow again and layer on acquisition revenue, almost all of the field EBITDA acquired will fall straight through to consolidated EBITDA, increasing our consolidated EBITDA margins and our pre-tax-free cash flow, which will be highly accretive to earnings. Thus we remain highly confident that we can achieve our five-year revenue, consolidated EBITDA and EPS goals that are included in this press release and detailed more thoroughly in our newly revised Company and investment profile.

Which brings me to the highlight of this call. The introduction of Brad Green, the Executive Vice President of Strategic Development and a member of our five-member executive team. Brad joined Carriage as General Counsel in late 2006 and has had a major impact in the transformation and upgrading of many of our support departments and the positioning of Carriage for growth over the next five years.

Since being promoted to lead our acquisition program one year ago, he has accomplished and learned much, including building a staff of first-class professionals in his department. He has worked really hard the last six months and accomplished all of the results in the second quarter, and was scheduled to call in and present these acquisition results and outlook, but because of a communications breakdown, he is unable to do so.

So I will do my best to substitute for him and will literally read word for word his script, which is as follows.

Thanks, Mel (laughter). And good morning, everyone. While I have participated in our quarterly conference call for the last four years, this is the first time I am a scheduled speaker. So I want to take this opportunity to talk a little more in-depth about our acquisition strategy and approach so you, as an equity investor or one of our creditors, can understand our acquisition strategy and our efforts.

This is especially important when you consider that the approach to acquisitions in our industry is a little different, in large part due to the owner's personal relationship to the business. As we have mentioned in recent conference calls, Carriage has been actively engaged in identifying and evaluating roughly 10 to 15 strategic markets around the country.

We have identified these strategic markets by focusing on the market size, the demographics in the markets, and the competitive landscape. Identifying a strategic market is merely the starting point of these efforts, with the next step being the identification of high-quality funeral home and combo acquisition candidates.

While there are exceptions, such as a tuck-in or that scrappy small business that could benefit from our excellent support structure, we are primarily interested in funeral homes and combos that [although] the market leaders are a strong number two competitor with a strong brand, but which still has the opportunity for growth. Based on strict criteria, the acquisition candidates tend to be leading businesses who are well-known within our industry and have quality operations that we believe we can learn from, but also can provide support to bring these businesses to the next level of operational excellence, growth and profitability.

As you might expect, this type of business represents a very small percentage of those businesses that are actually for sale. In order to successfully acquire the caliber of businesses that we would like to bring into the Carriage family over time, we have to understand why they are a potential seller. What are their motivations, even if that sale is several years away, and have a realistic expectation of the link of the process.

As a result, a good deal of time is spent developing a relationship with owners, as well as the owners getting to know Carriage. A key focus for Carriage is to determine an owner's motivation or rationale behind the decision to sell the business. While each situation is unique, based on our experience, we believe the healthiest reasons include, one, succession planning issues -- such as family members do not exist or are not interested in running the business or not quite ready to acquire and run the business; or two, the owner has reached an age where they are ready to retire or slow down because of health issues, or they have simply tired of the daily burden of operations.

Even when an owner is looking to sell their business for estate planning purposes, one of these two factors should always exist. By truly understanding the motivations are selling, we can identify the owner's expectations and ensure that we can meet them. If we cannot, we simply will not purchase the business.

In addition to Carriage getting to know owners, we spent a lot of time educating the owners about Carriage. After all, most independent businesses in our industry are multigenerational, and all of them represent the current owner's life's work since they have spent many years growing the business themselves. As a result, independent owners have deep ties within the community, and the responsibility that follows those ties.

These businesses are very personal and dear to the owner. After all, their family name is usually on the building. And they don't want to turn the business over to just anybody. Oftentimes, owners we speak with are more concerned with how a potential new owner will act as a steward of their business and their name going forward than they are with how much money they can get by selling the business.

Even though we are a public company, and we think we are very good at what we do, not everyone is familiar with Carriage. We spend a great deal of time meeting and talking with owners of businesses to help them understand our Company, our standards operating model, our guiding principles and our approach to the business.

While part of this courtship processes about us getting comfortable with their business, more often than not it is more about the potential seller getting comfortable with the idea of becoming part of Carriage. As a result of our strict acquisition criteria and strategy, the high caliber of businesses we are seeking to acquire, and the time it takes to build relationships of trust, with potential sellers, we are pursuing a measured acquisition approach.

Our target is to acquire an average of $10 million of revenue per year over the next five years. That being said, some years may be lower, while others may be higher.

Year-to-date in 2010, we have acquired three funeral home businesses with an aggregate revenue range of about $8.2 million to $8.8 million. For the balance of 2010, we do not have any opportunities that are imminent to close, but believe there are several opportunities that could materialize this year that would be good for those businesses, for Carriage and our shareholders.

In summary, the future looks very bright. We are reviewing a number of attractive opportunities and believe the overall environment for acquisitions of the type we are interested in is extraordinarily positive. We will remain focused and selective with our approach to acquisitions and continue to believe that our acquisition strategy will reward our shareholders over time.

With that, I would like to turn the call back to Mel for his closing comments.

Thank you, Brad. Now, speaking for myself, as well as for Carriage, I would like to say that our ours is a very personal service business where strong and continuing relations before matters are taken seriously. So I would personally like to take this opportunity to welcome Dennis and Linda Gallagher of Heritage Memorial Services in LA, and Mike and Juliana Fuller of Fuller Funeral Homes and Cremation Services in Naples, Florida to the Carriage Family.

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

(Operator Instructions). Clint Fendley. Davenport.

Congratulations on getting the acquisitions done here. It sounds very nice. I wondered if you could talk just a moment about -- in the press release, you mentioned the change in some of your managing partners and several of your cemeteries. Is that something that you guys have focused on more so in the second quarter, or is it more just a continuation of what you began earlier in the year?

You know, it's been an interesting thing, Clint. We've gone through these periods and, as you know, we changed quite a few people of the cemetery operations over the last two years in '08 and continuing into '09. And that settled in, and worked really well in '09.

But what happened has been very interesting. We did have some underperformance and some managing partners that were replaced. But that wasn't most of it. We had an opening in Rolling Hills for literally a year. We took our time there because we wanted to get it right.

Now, what has happened is, we have been approached by candidates from other independents, as well as other companies, to join our Company. And these approaches were not solicited. So we have taken the opportunity over the last six months that happens to coincide with a downtick in the second quarter of pre-need property sales of upgrading the operating leadership at several of our larger cemeteries, including Rolling Hills.

We are very impressed that our reputation and delighted that our petition is spreading in the cemetery industry and attracting this quality of talent. We haven't targeted anybody's top people. They are just, we are finding that bringing people into a smaller company, where we can shine a light on them and they can do what they can do, is kind of a big deal. So we are real happy about it.

I do think that this talent that has joined our Company over the last six months, as Terry mentioned, will lead to better sustainable performance in our Cemetery Operations in the second half and thereafter.

Have you had any turnover at some of your larger properties, like the one in Richmond, California, and also in Fort Lauderdale?

Well, Rolling Hills is in Richmond. Our managing partner there, whom I think you met at one point --

Yes.

-- actually moved back to Indianapolis. His family wasn't happy in California, about a year ago, maybe more. And maybe a year and two months. So we did not quickly replace them him. And we just replaced him two months ago with a top-notch guy.

We'd moved a couple of people around who we found better spots for or they requested a change in location. For example, we made someone from [Kanahill] Mountain, which is an acquisition we made in early 2007, and to a great business to Boise, where he had someone running that business. It's a big funeral business, a smaller cemetery business. His background was funerals.

So we had a guy want to move his family up there from California. We took an opportunity to upgrade the leadership at that business while replacing him with another top-notch person that was looking to get into Carriage. So we've taken -- we've taken the opportunity to move some good people to other places where they can contribute even more, and then to replace them with other talent trying to come into our Company.

We have never had as many people wanting -- who have really top-notch backgrounds and resumes and experience wanting to get into the Company when we didn't have enough big, bigger places to put them. And so, this has been a nice problem to have, and we took advantage of it.

And just I guess on the pre-need property production for the quarter and the cemetery, just trying to understand, and I know you guys were up against some tough comps in that area. Have you seen any change in the selling environment for the better or worse during Q2?

Well, Clint, this is Terry. We have had a lot of activity. I think the economy -- well, I can tell you in a couple of our key locations, the economy has impacted the sales this year. But the activity and the interest in some of the contracts which we haven't recognized yet, like I was referring to, we've got a large private family mausoleum contract that's in place now. We've got a large specific garden contract that is in play right now.

We are seeing a lot more activity and what we are seeing, and I think with the people that we have and the stableness of the sales group, we are able to gather the future probably better than we have historically. So, yes, I think we are seeing some things turning up. They just haven't hit the revenue under GAAP yet. But the activity is stronger.

I will mention one other point, Clint. We have had some -- as Terry started out, historically we have been primarily a funeral operations company, about 75% of our revenue. And so we promoted funeral operators to hit combo operations. And we have noticed over time that that is a little difficult to perform with these big combos, to get the pre-need property sales up.

So in two of our larger cemeteries, during the second quarter, we actually upgraded the managing partner, moved a great operator to other funeral operations, where they can really do a much more focused job without the cemetery distraction. And I think the new talent that's coming -- that has come to us, has come up through the cemetery route. So I think you're going to see a difference.

They think bigger, they think differently about property sales and projects. And I think it's going to make a real difference.

Thank you. And last question here. Melvin, could you update us on what where you are on implementing some of your incentive-based performance metrics on the Cemetery side of your business?

Yes, actually, we are having a meeting of our Standards Council in October to go over that. There will be some revisions. On the Cemetery side, we are much more evolved on the funeral home side and the results speak for themselves.

I asked Jay Dodds the other day, I said, Jay, where do you think we are the cemetery standards in terms of where we are on the funeral? We're probably 8, 8.5 out of 10 over the last seven years has been moving up. And we are going to make some changes in October with our Counsel.

But on the Cemetery he said, we are probably about a six. So I think we are going to incrementally move up that line and get better results and get some more metrics that make -- especially with these new cemetery prose we've got, I really do think it's going to make a difference.

Thank you, guys.

(Operator Instructions). Alan Weber. Robotti & Company.

Just two quick questions. One is, when you talk about the rolling projections, can you talk about, I think you said maintenance cap is $9.5 million. Is that kind of what you assumed for the next year? Is that a fair number for the next few years? Or will it just creep up a little bit with the acquisitions?

No. We don't have any particularly significant maintenance CapEx planned for the acquisitions. The facilities that we have acquired in these deals are in really good shape. Maintenance CapEx actually should come in less than the $9.5 million that you mentioned.

Historically, we have been looking at, roughly, $6.5 million, maybe tops, $7 million. So for year-to-date I think we are at about $3.4 million in maintenance CapEx. $6.5 million to $7 million is really what recurring maintenance CapEx typically should represent.

Okay. And then your actual, what you saw for the rolling four quarters, your actual cash taxes you should expect to pay? Just roughly.

The cash taxes that we expect to pay during the next rolling four for quarters is going to be less than $1 million.

Okay. And then I guess, Mel, kind of a general question. You alluded to that death rates and like that. When you look out, I don't know, x number of years, how much of a swing factor would you think that will be at some point for the Company?

I couldn't possibly tell you. I don't know who can. We simply -- if you look at our Company investment profile, we assume 2% same-store revenue growth. That could come from volumes, it could come from average. It can come from trust returns. It can come from anywhere. And that's, historically, we may have been a little up or down from that trendline in the past, but not far.

And so, that should be -- that should take into consideration whatever happens to death rates. And none of that assumes a higher death rate. On the other hand, whenever that happens, 2% revenue growth won't -- that will be low.

Right. And I guess -- and is there a way, when you talk about gaining market share with your operating standards that you have now, which is, when you think that through, can you -- do you like, can you in your mind equate to like, saying, what inning do you think that's really in, in terms of reaching the top levels you can reach?

The market share?

Yes. When you talk about gaining market share, because a lot of these programs you have -- it's not like they're 20 years in place. They are relatively new. I'm just curious, when you think out a few years --

Yes. I don't know if -- I don't really know what death rates were in the first half. I do know that just listening to others around the industry and vendors and such, it was on the weak side. I don't know that I said we are gaining market share. We are gaining market share in a lot of markets because we track those markets for 10 years by competitor. And you can see the percentages of your market versus those of competitors over time. And you can track the trends.

And that is what we like to look at as a rolling 10-year competitive position for each business. You can clearly see marketshare growth on a relative basis, using that metric. And on the other -- we have fewer places that are clearly losing market share.

On a combined basis, our stable volumes, I think, speak very highly for the model and for the leadership we have in place. So we just made a very conservative assumptions going forward, I think, 2% revenue growth.

Right. Okay. And then I guess I have to ask, what was the thought process behind buying back the bonds and not buying back the stock?

Well, buying back the TIDES, I mean, they were trading at a yield which was approximately 12%. And we haven't seen that type of opportunity in the markets. When we look at that, we used the returns on the acquisitions as a guidepost. Is this a good opportunity or is it not?

Quite frankly, it needs to be in that range of approximately 12% for it to make -- as far as a return, to make sense for us to buy back those TIDES. The bonds right now are selling -- well, the most recent sale I think was like [$98.75]. So they are trading at almost par. There are no opportunities in that right now.

So our cash flow and the use of our capital, we believe the best use of that is for acquisitions. But this opportunity came up with the TIDES, so we took advantage of a little opportunity there.

The other thing is when we finished the stock repurchase program, we had gotten to a point where the volume that we could actually buy was just so small, the last part of that just trickled in in 1,000, 2,000 shares a day. There was really no volume in the selling.

Our volume of trading has continued to be very, very limited over the last several months. So there wasn't any kind of quick selling that we could take advantage of at a price that we thought was attractive, whereas this thing just popped up. And you could just pull the trigger on it one swoop. That is what we did.

Okay. Great. Thanks an awful lot.

(Operator Instructions). And I'm not showing any further questions at this time. Management, please continue.

Well, I'd like to thank everyone on the call and thank you for your interest in Carriage. We look forward to reporting our third-quarter results.

Thank you. Ladies and gentlemen, that does conclude our conference call for today. If you would like to listen to a replay of today's conference, please dial 303-590-3030, using the access code 433-1223. Thank you for your participation. You may now disconnect.