Carriage Services Inc (CSV) 2010 Q4 法說會逐字稿

Good morning and welcome to the Carriage Services fourth quarter 2010 results conference call. All participants will be in a listen-only mode. (Operator Instructions)After today's presentation, there will be an opportunity for you to ask questions. Please note that today's event is being recorded. And at this time, I would like to turn the conference call over to Miss Alexandra Tramont. Ms. Tramont, you may begin.

Thank you, and good morning, everyone. I would like to welcome you to the Carriage Services conference call. We are here to discuss the Company's 2010 fourth quarter and full year results, which were released after the close of the market yesterday.Additionally, Carriage Services has posted supplemental financial tables and information on its website at www.carriageservices.com. This conference is being broadcast live over the internet on Carriage's website and a subsequent archive will be available. If you would like to be on the e-mail distribution list for future Carriage Services releases, or if you would like to receive a copy of the press release, please call our offices at Financial Dynamics at 212-850-5600, or visit Carriage Services' website.

This conference is being broadcast live over the internet on Carriages' website, and the subsequent archive will be made available. Additionally, in a few hours, a telephonic replay of this call will be available, and active through March 7. The replay information for the call can be found in the news release distributed yesterday.With us today from management are Mel Payne, Chairman and Chief Executive Officer, Terry Sanford, Executive Vice President and Chief Financial Office, Jay Dodds, Executive Vice President and Chief Operating Officer, and Brad Green, Executive Vice President Strategic Development.Today's call will begin with formal remarks from management followed by a question-and-answer period.

Please note that in this morning's call, management may make forward-looking statements in accordance with the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. We would like to call your attention to the risks associated with these statements, which are more fully described in the company's annual report filed on form 10-K and other filings with the Securities and Exchange Commission. Forward-looking statements assumptions or factors stated or referred to on this conference call are based on information available to Carriage Services as of today. Carriage Services expressly disclaims any duty to provide updates to these forward-looking statements, assumptions, or other factors after the date of this call, to reflect the occurrence of events, circumstances or changes in expectations.

In addition, during the course of this call, management will reference certain non-GAAP financial performance measures. Management's opinion regarding the usefulness of such measures, together with the reconciliation of such measures for the most directly comparable GAAP measures for historical periods are included in the press release in the Company's filings with the Securities and Exchange Commission. With these formalities out of the way, I would like to turn the call over to Mel Payne, Chairman and Chief Executive Officer. Mel, please go ahead.

Thank you, Alex. We're pleased to report on our fourth quarter 2010 and full year. I'm going to make some remarks at the end of the executive remarks, but I'll turn it over to Terry at this point to go over his comments.

Thanks, Mel, and I'll like to welcome everyone on the call.We are very pleased with the results for the fourth quarter and the year 2010. Compared to the fourth quarter of 2009 and the year 2009, we actually grew revenues and EBITDA in the single digits, and grew net income, diluted EPS, and free cash flow in double digits. For the fourth quarter, which included reveenues from our 2010 acquisitions, we grew revenues by 6.6%, which is in line with our long term outlook of revenue growth of 6% to 7% annually, including acquisitions. Our forecasts have long been in our Company and investment profile and our documents. Our organic growth is generally in the range of 2% and our growth from acquisitions is generally in the range of 4% to 5%. There are several highlights for the year 2010 that I would like to review with everyone.

On the funeral side of the business, which is almost 75% of the Company, we experienced an increase in volumes. In a market where the number of deaths in the US actually declined. Market share is a very important attribute in growing organically. If the customers don't come into your business, you're not going to gather the revenue. Secondly, we completed acquisitions in 2010 that generate annualized income of approximately $10 million. These acquisitions were paid for with cash generated from our operations during 2010. Thus, they're going to typically be very accretive to our forward earnings.

Transaction and integration expenses negatively impacted our earnings by $0.02 per diluted share. Thus, on a non-GAAP basis, as a lot of people report this, we earned $0.47 for 2010. Furthermore, we will see significant improvement in the earnings from the 2010 acquisitions in the first full year for them in 2011. We have provided our forward guidance in the back of the earnings release, as you can see, and a good bit of that improvement will be attributable to the businesses that we did acquire in 2010. Thirdly, our free cash flow was very strong, at $18.6 million. The industry, quite frankly, has always been a good cash flow generator. Improvement in management of our working capital did provide a slight boost to cash flow from operations for 2010. When you consider the fact that we have approximately 18 million shares outstanding, and approximately a $100 million market cap, the free cash flow provides some pretty strong data points for investors that are interested in viewing the results in way of free cash flow per share and the cash flow yield that the company provides.

Lastly, our trust funds had another outstanding year, the returns on our total trust funds were 47.4% for to 2009, and 18.4% for 2010. During 2010, we realized gains in the trust funds of approximately $30 million, and currently we have a little more than $30 million in unrealized gains in the portfolio. As you can see, income from the trust funds have significantly improved our 2010 earnings, and will continue to, as the pre-need contracts mature in the future. With that, I would like to turn the call over to Jay Dodd to provide some color on operations.

Thanks, Terry, and good morning. As you can see from our fourth quarter and year-end results, we continue to focus on executing our standards operating model, which is defined by a balance of market share, quality of people, and operating and financial metrics, especially profit margins. We are pleased with several aspects of our operating performance, and look forward to focusing on areas that need improvement. Our special focus during last year at our local businesses was on same-store market share. We understood that the death rates were down and the weak economy caused and people to look for less expensive options. This was a tough environment and our local people did a very good job of maintaining their market heritage. Our standards operating model rewards managing partners for maintaining and growing their volumes.

In 2010, we did whatever it took to get that one extra funeral or internment. However, maintaining and growing our same-store volumes by doing, whatever it takes, to get the calls, drove our discounts higher and created less than expected revenue for the year. Considering the high- fixed cost nature of our business, the lower than expected revenue, created pressure on our field EBITDA margins. As we enter 2011, we are focused on executing all of the components of the standard operating model, Thus, producing modest revenue growth and subsequent margin growth, especially our field EBITDA margins to sustainable long-term levels.

I would like to introduce Doug Gober on this call, our new training and development professional. Doug was a pivotal person that worked closely with us during our personalization and cremation training initiative. And previously, he presented one of our major vendors. Dough is taking the lead with our people development programs and will greatly enhance our efforts to provide first rate training and skill set improvement with our field and corporate employees. The development of the learn skills will create more service opportunities, thus higher funeral and cemetery averages over time. The training department will be creating new training modules to continue the skills development of our employees who touch the customer. We look forward to a seamless training and development program that works to achieve our operating goals.

Acquired businesses take an average of six to nine months' time after closing to fully integrate into the Carriage way of operating. Thus the 2010 acquisitions did not produce meaningful results in 2010. This timeframe will be shortened early in 2011 with a revised improved integration process by our new transition team. We restructured and re-prioritized several facets of the transition of new businesses and have streamlined methods to help assist new acquisitions, understand and execute our standards operating model. Our 2010 acquisitions are expected to be at 80% to 90% of underwriting performance by the end of the first quarter. They are currently on schedule to achieve that goal.

In conclusion, we are excited about reporting our quarterly results this coming year, as a lot of hard work has transpired over the last couple of months. We are looking forward to a strong year with modest revenue growth and improving margins. With that, I would like to turn the call over to Brad.

Thanks, Jay. In late 2009, when Carriage added strategic development to my area of responsibility, the directive was very clear. Build a team capable of executing our strategic acquisition models so that our 10-year vision and strategy of affiliating with many of the best remaining independents could be achieved.Carriage reiterated this goal multiple times throughout the year by consistently focusing on our five-year forecast, which basically includes an average of $10 million per year in acquired revenue over the next five years. In plain English, we said we would add approximately $10 million in acquired revenue in 2010, and that's exactly what we did.

We have the same goal for 2011, and it's certainly my expectation that we will meet if not exceed that goal. How? Well, in 2010, we added to our analyst team as well as David Adams who has 35 years experience in our industry. He is utilizing a grow reputation and established relationships to expand Carriage's reach with the leading high quality funeral operators in our industry. We will continue to selectively acquire high quality businesses that we believe would be a good fit in our organization. That fit includes say ensuring that the former owner shares the same value and expectations, which basically means that they remain interested in protecting the businesses' name and reputation even after that they are gone as well as making sure that the acquisition is a smart use of our capital, generating near and long term growth and profit opportunities.

Again, bluntly speaking, we now have the right people who are keenly focused on the right factors to insure that we will be successful with our acquisitions in 2011. No doubt, we will say no to businesses more than we say yes, which means you will know that when we say yes, it is a good acquisition. That's it for me, Mel.

Thank you, Brad. I would like to take this opportunity to elaborate on a very important value imbedded in -- within Carriage that we haven't been able to properly define up to this point. That's the imbedded value in our three types of trust funds. We have reported frequently and in depth on the extraordinarily successful trust fund repositioning strategy during the 2008-2009 market crash. Whose future benefits until now have been difficult to quantify, but at this point, the benefits have begun to show themselves clearly, and are so material that we have changed our internal monthly operating reports, as well as our external trend reports.

While there is no guarantee that a major market correction would not reverse some of our gains. We are working closely with our investment advisor inventory lock in more of the gains and long-term fixed income securities over time. We've also begun to better and much more specific handle on the range of future benefits that will flow through our income statement and permanently boost portfolio and earning power, which will be reflected in our field EBITDA and consolidated EBITDA margins.

Let me briefly cover what's happened over the last 2.5 years. At June 30, 2008, pre-crisis, our discretion trust fund cost was about $132 million. Our market value at that time, since the market had begun decline was something less than that. Our total income in dividends and interest from discretionary trust was $3.9 million. So at that point, we were -- as contracts matured, having normal levels of revenue and gross profit on our pre-need trust contracts, which represented about 6% to 7% of our funeral revenue. And the maturity was about an average of 12 years.

On the cemetery side, the financial revenue from the trust was a much higher percentage of the total profit, as much as 30% to 50%, depending on the business. Because of the repositioning strategy from October 15 through today, we have increased the permanent earning power of our portfolio. We move from equity and fixed income mutual funds and ETFs to directly owned common stocks and fixed income securities during the crisis in mostly large capitalization companies.

During the repositioning, we incurred about $32 million with losses in late '08 and early '09, while the repositioning strategy was executed. In the second half of '09, we realized $9.1 -- $9.3 million of gains, and, as Terry said, almost $30 million of gains in 2010. As the new positions had huge gains when the market and economy began to recover. Our annual income from dividends and interest in the discretionary portfolio, increased by $4.34 million or 111% since June 30 of '08, to $8.24 million currently.

At the current time, our discretionary trust fund market value, as that's as of today, is about $190 million. That includes about $1.6 million in accrued interest and dividends. Our unrealized gains are about $30 million of which $14 million are equity and $16 million are fixed income. As about $10 million of these equity gains turn long term in the second quarter, we plan to harvest these gains, assuming they're all still there, and reinvest the proceeds mostly in our fixed income portfolio to build our permanent income. We also plan to harvest at least 10 million in fixed income gains in the first half, and reinvest those proceeds and other fixed income securities of equivalent quality and yield. So we will realize up to $20 million in additional long-term gains in the first half, and push those gains down to individual contracts. This will also have the impact of increasing our annual income from $8.24 million currently, to approximately $10 million by the end of 2010.

As I've said the average life maturing pre-need contract is about 12 years. We currently have about $57 million of excess trust funds compared to the level that we had for existing operations in 2008. To give you some idea of what that excess trust fund return would do in the future, we have been running different scenarios. If you were to analyze -- amortize the $57 million equally over 12 years, just as an approximation of the annual benefit, on average, it would be about $4.75 million, which is about $0.16 a share since $300,000 pre-tax is a penny a share. That's not how it will happen, but you're going to probably have excess trust fund income over 2010. We are assuming about an extra $1 million over the 2010 level, and that $1 million will escalate more dramatically over time, to as much as $10 million if you get out 12 years.

We don't actually no, actuarily how this income will unfold. What we will assume is that we will continue to earn return on the $190 million, and that will compound over time. So we don't -- the point I'm trying to make is that the benefit of the repositioning strategy has not peaked in 2010. It will continue to show itself over time and increase our earning power both at the individual level, and as a consolidated platform at a consolidated EBITDA margin level.

With that, and considering our positioning in the industry landscape, we are very optimistic, as Brad said, about new acquisitions and the quality of those acquisitions being accretive. We were very optimistic about the talent we have in our operating portfolio. We believe that our EBITDA margins -- still EBITDA margins show considerable improvement this year. So, we are very optimistic about not only 2011, but the next five years, and we look forward to reporting that progress as it unfolds. With that, I would like to open it up for questions.

(Operator Instructions)And our first question comes from Clint Fendley.

Hello, good morning, guys.

Hi, Clint.

Hey, Clint.

Thanks for the commentary here, Mel, on the trust fund, and clearly you guys have repositioned the fund into fixed income securities. I wondered how you guys are viewing your repositioning in light of a marketing environment if we were to see rising interest rates. I mean, what impact could that have on your future benefits?

Yes, we took that into consideration as we did the repositioning. We were carefully -- to make sure we were getting very long maturity securities of quality, and we rotated out of the lower coupon maturity -- or securities during 2009. As we entered 2010, we took gains of shorter maturities, lower coupons, higher top investment grade securities, and rotated into preferred stocks of too big to fail, institutions. So I think today we have a fixed income portfolio that is -- I wouldn't say that it's immune from higher interest rates, but it has such a strong current yield and a long-term maturity that matches up with our liabilities, that there really should not be a huge issue.

Clint, also I would like to just throw this comment in, too. One thing that helps us is we really don't have any type of liquidity risk, because we sell more pre-need trust policies than we have mature at any particular time. So it's not like we would have to liquidate any bonds at losses or lower values than they may have right now. Also for investors out there, they always ask this question, the duration of our fixed income portfolio is approximately seven years.

Okay. Thanks, Terry. That's very helpful. And last question, I wondered if you guys could just maybe give us an update on what you have seen from a volume perspective here in the first quarter. I mean, January is completely done. We're very well into February. I think everyone in the sector seems to have maybe a heightened expectations about how the volume is trending here. Any thoughts on that?

Yes. It's been real good. (laughter)

Any numbers for us?

Well, I don't want to give you a number, but I will just say that I didn't think there was much of a flu season, but we certainly had a lot of volume in January.

One way to look at it, Jim, in our industry, it's a little dangerous to try to judge volumes on a one month basis or short term. As we get a little farther in the year, we'll have a better feel for how this may be trending, but we have experienced very strong volumes thus far in the first quarter.

Okay. Great. That's very helpful. And thank you guys, and I also would like to say great job on the revamp of your website. It looks great.

Oh, thank you. I'm going to give Skip Klug, he's sitting here -- he didn't talk on the call, but he's the genius behind that, and thank you for that.

Good deal. Thanks, guys, have great weekend.

And our next question comes from John Ransom from Raymond James.

Well, stole my question on one-key volumes, so I had to make up something else. (laughter)Kind of disappointing. My question is just the tone of the acquisition market. Is it a -- is there anything different motivating people to sell than maybe five years ago, number one. And number two, is it too [fossil] to say that we cleaned out all of the backlog in the '90 and we had to wait, and now that we've done that, to the market is more normalized, number two. And number three, yes, you're trading at ridiculous multiple of free cash flow. Is it possible you can buy stuff at an even cheaper multiple than where you're trading or are you really trading down value by having to pay more on that market and where the stock market's got your free cash flow value? Thanks.

Thanks, John. I'll start with your last point. I couldn't agree with you more, it's ridiculous evaluation. I'm assuming that as we execute this year it won't stay there. We're finding wonderful opportunities in the acquisition area, and we have worked so hard over the last eight years to build a different kind of platform, operating model, and it's -- and the reputation is spreading. So, we're being very selective, as Brad said. The motivations haven't really changed, but we are finding that a lot of people probably sold in the '90s because of price at too young an age. They weren't old enough, they didn't have bad health.

In many cases they did go for the evaluations that were so high back in those days, so there probably was -- it probably burned into the normal succession planning issue for a number of years, but we see top independents who now, after 12 years of very little consolidation, have some issues, and whether it's a family issue, financial issue, or age issue, or health issue, we're finding lots of opportunities to get really extraordinary returns on our invested capital. And we're looking at opportunities as well to lock in low cost of capital, and I think it's going to be a wonderful five years.

Brad has put together an amazing group. He's been out building our reputation and spreading the word of what kind of places fit our model, and we're not having a lot of competition. It's not really a price issue like it was in the '90s. We pay fair for a really good business, but we want to buy a business that in five years we've grown the business organically, and whatever multiple we paid, say six. We look at it five years later, and it's 4 to 4.5. We just keep doing that successfully, one at a time, over five years, and we'll create a lot of value.

And our next question comes from Nick Halen from Sidoti & Company.

Good morning, guys. I just had one quick follow-up question for you. Obviously cremations continue to pick up steam, and it seems that a lot of the acquisitions that you guys made in 2010 were focused in some pretty heavily focused cremation areas, and I was just wondering if you could give us a little bit of an update on -- if there are any additional services that you guys implemented in, I guess say, the fourth quarter in terms of the cremations, and is there demand for anything in specific that you're seeing that can help hopefully offset any declines in revenues from versus say a burial?

Well, this is Jay, Nick. Not -- we didn't really do anything special in the fourth quarter. We continued to stay focused with quality of service, and it's really the service part of the cremation that we're focused on, not really the cremation aspect, but there are some different products that have come out that will help with that. In addition, Doug Gober, who we brought into our training and development, is a marketing guy with a vast background in merchandising, as well as in service offerings. So, as we continue to see the cremation rate rise through the bulk of the nation, we continue to see more families choosing services, and that's really where our margins and revenues can be impacted the most.

Let me comment on that, too. I think there's been an impression, and we probably helped build that impression, that there's been an accelerating cremation mix increase over the last five years, let's say. And we started looking at our data and the way we report, and we report on the cremation rate. Well, if you look at our same store businesses over the last five years, which we were -- that's how we report each business. The burial rate, not the cremation rate, over that five-year period, has gone down by 540 basis points. So that's only a little over 100 basis points a year.

And what has confused and made the mix shift look a little more volatile, I don't know about the other companies, but we also have a category called Other, and it's got things like ship-ins, ship-outs, and just different things in it, and it is kind of a volatile category, and it makes -- it's the average of that is more in line with the cremation average. So, it makes the cremation percent hop around a little bit more than it otherwise would. If you look at only the burial rate, it's much more consistent year over year, over year, and it showed there is a long-term secular increase, certainly in the cremation rate, but the burial rate is coming down only steadily, about 100, 110 basis points a year. So there's no crisis, and we see very certain 2% same-store growth going forward.

No, it's very helpful. And also, can you give us a little bit of an update on the pricing environment for cremations? I mean, is it a thing where as we've seen every year a little bit of an up tick in cremations, you guys have been able to charge a little more per cremation. Is that something that's true?

Yes, that's true. The -- as I mentioned a little early, the products and services you get from cremation are continuing to expand, with more creativity, and it becomes more of a normal thing where families come in and are asking for things. And also our technology that we've been able to offer them has helped as well.

Let me make a very key point here. If you want to look under the covers at our standards operating model, we have two standards related to the people, quality of the people and continuous upgrading of them people. And part of that is the skill set that Jay talked about, and Doug joining our company was a big deal in our industry. Everybody knows him. He's a top-notch talent and his mission is to take that quality of staff, and continuous upgrading of staff, and to make our people better with their skill sets. If they can't get to the high level of excellence in terms of presenting all the options, then that means we need to stop training that person and get somebody who can. And this is a continuous, continuous 24/7, seven day a week drive to improve the quality of our people, and therefore improve the quality of the value we offer, and therefore improve the market share opportunities. That's how it works.

Great. Thanks, guys.

(Operator Instructions)Our next question comes from Steve Crystal from the Clark Estates.

Good morning, guys.

Hi, Steve.

Based on your free cash flow calculation that you use for guidance, it suggests that you could buy back 17% to 19% of the equity at the current valuation. Is that -- and while investing to maintain the current business. Is that how I should look at that?

If -- I guess that's one way to look at it, if you had enough people willing to sell us stock at the current price, and we used all of that money to buy it in, that is how the math works.

(laughter) Okay. I just wanted to make sure we were -- I was using the same definition as maintenance CapEx as the Company does. And I guess one of the things I was interested in, is that I was wondering if you could discuss a little bit how the management and the Board contrast acquisitions, growth capital, and buybacks when considering what will provide the best returns for shareholders.

That's a great question, and I appreciate that question, because we talked about that a lot. I guess the prevailing view at the Board, and with the senior executive management team, is we did something really smart in the height of the crisis, and we bought in 15% of our outstanding shares using free cash flow. We didn't do it with any debt. Not much was going on in the way of acquisitions during the crisis. Everybody was frozen. Here we are in a completely different environment. The market for acquisitions has improved tremendously. We are incredibly well positioned to take advantage of that. The debt capital is cheap again. We have access to capital without diluting the company with the need to raise equity at this point. We're producing a lot of free cash flow. And the opportunities we are seeing offer returns on investment capital of 15% to 20%.

Even today, and that will grow over time, as we execute those acquisitions and improve their businesses. So if you -- if we do that, we have to look at what size market cap company do we want to be. It is certainly true that we could be buying in our shares and reducing the float. We're thinking a little bigger than that, and I want to make sure that investors understand. We want institutional investors to see our Company as a great long-term investment over the next five years. For them to feel comfortable that they can get in and own stock without driving up the price suddenly, we have made the decision to allocate capital while the getting is good for these acquisitions. We have never seen it as good as it is for our Company. And so that's a conscious decision to build the Company through growing rather than the buying in stock at this time. That's not to say that at some point, if the market doesn't value what we're doing, and yet we're doing it really well, that we wouldn't consider buying in stock, just as we did in 2008, 2009. I hope that helps.

Yes, it does. I appreciate the comments. I hope that going forward there is the idea that there can be a balanced approach, because as you said, if you execute on your -- on these acquisitions that you recently did and the business continues to improve, the price probably won't be here, so it could be a limited opportunity, as you know, to buy the stock at this kind of valuation.

Understand. We don't quite understand why the stock relative to our peers seems severely undervalued. We're assuming that if we execute well getting out of the gate here in 2011, that will only be a short-term problem.

Yes, that will take care of itself if that works out that way, but as far as the concern about the float for institutional shareholders and such, I think that if you drive value per share and that is the main focus, that will reward all of the current shareholders, so I think that's my only -- my only comment on that. I don't necessarily think we need to have a certain market -- a certain revenue size, or certain capitalization, it's really a value per share should be the focus, in my opinion. But the last question I have is the -- when I think about the earnings that are contributed from the financial services and the trusts, is there any way to think about a range that could be at for a given year, over time?

It's hard to predict because of the unknown about when the contracts will mature. What we do know is that the income is growing rapidly. I think it will get up to $10 million annually this year, which is 2.5 times what it was in mid '08. So that income is accruing on all the contracts all the time, and then when we push down big chunks of realized gains, you would have big jumps. So I think -- we took off these unreal -- these realized losses to reposition, now we've had about $40 million in gains, so we're net positive about $8 million or $9 million in gains, plus all of the accrued income, and you're seeing big jumps in the reported financial revenue. Now if we build the income more this year and push down another $20 million of gains, it's hard to predict, within a small range, what that will be in terms of reported financial revenue. We're estimating that overall it will be another $1 million over last year. But we could -- we could -- that's a guess.

Right. So any given year, there could -- is there a wide range I should think about? Because I think it was a total of $0.15 for 2010. Is there -- there's no way to really frame that?

Well, I think we're going to, like I said, push down another $20 million in the first half. We ought to get the full benefit of that in the third quarter. So we'll see sort of by the end of this year how that is trending by category. And so we probably have a much better feel by the end of this year than we even do now.

Okay. Thanks, guys.

You bet.

And our next question, and final question comes from Alan Weber from Robotti & Co.

Good morning.

Hi, Alan.

Hi, Alan.

Hi, just a quick question. Back on the cremation, in the release, you made a comment that I think in 2010, some of the business you acquired were predominantly higher cremation areas in the country. I'm just curious, when you look at it, are you indifferent to that and just look at how it kind of plays into your overall model, and you're indifferent whether it's inthe high cremation in the country or less?

Well, let me -- that's a great question. We have actually turned down businesses, big ones. I won't say where they were -- because we don't view ourselves as being in the body processing business. We're in the funeral service business, but where we do see a high cremation business already, and we're buying that business based on the profile of the mix, and we see opportunity to improve the quality of that mix, not necessarily the mix itself, but we see a lot of direct cremations, and we know that the customer base is not trying to go purely for price, that's an opportunity, that's a glass half full.

So we would view that as an upside opportunity, notwithstanding the high degree of cremations. That happens to be the case, for example, in Naples, where we bought a big business. Happens to be the case in the two businesses we bought in LA last year, both with tremendous upside on that opportunity.

If you looked at your kind of revenue per cremation, and you look at kind of the acquisitions that you see, do you see, for the most part, that you're able to get more revenues by providing more services with cremations than the smaller independents typically do today?

Yes, absolutely.

Okay. Great. Thanks an awful lot.

You bet.

And at this time, it's show nothing additional questions. I would like to turn the conference call back over to management for any closing remarks.

Well, we appreciate all of the good questions and the attention to our Company. We look forward to reporting the first quarter soon, and we'll talk to you again then. Thanks.

That concludes today's event. Thank you for attending today's presentation. You may now disconnect your telephone lines.