Q1 2025 Carriage Services Inc Earnings Call
So the way.
A recording.
Speaker Change: Good day, and thank you for standing by and welcome to the carriage services first quarter 2025 earnings webcast. Please be advised that today's conference is being recorded I would now like to hand, the conference over to our speaker today, Steve Metzger President. Please go ahead Sir.
Speaker Change: Good morning, everyone and thank you for joining us to discuss our first quarter results. In addition to myself on the call. This morning from management or Carlos Casado, Chief Executive Officer, and Vice Chairman of the board of Directors and Jonathan Reich, Senior Vice President and Chief Financial Officer on.
Speaker Change: On the carriage services website, you can find our earnings press release, which was issued yesterday. After the market closed our press release is intended to supplement our remarks. This morning and include supplemental financial information, including a reconciliation of differences between GAAP and non-GAAP financial measures.
Speaker Change: Today's call will begin with formal remarks from Carlos and John will be followed by a question and answer period.
Speaker Change: Before we begin I'd like to remind everyone that during this call we'll make some forward looking statements, including comments about our business projections and plans.
Speaker Change: Forward looking statements inherently involve risks and uncertainties and only reflect our views as of today. These.
Speaker Change: These risks and uncertainties include but are not limited to factors identified in our earnings press release as well as in our SEC filings all of which can be found on our website.
Carlos Casado: Thank you all for joining us this morning, and now I'd like to turn the call over to Carlos.
Carlos Casado: Thank you Steve.
Carlos Casado: And welcome to everyone joining us for today's first quarter earnings call.
Carlos Casado: It is an exciting time at carriage.
Carlos Casado: As we turned the page on a strong 'twenty 'twenty four I am proud to share that our momentum continues.
Carlos Casado: We delivered another strong performance in the first quarter of this year, which reflects the strength of our financial strategy and our focus on disciplined execution.
Carlos Casado: Before diving into the numbers I want to recognize the incredible dedication of our carriage team their.
Carlos Casado: Their passion and purpose allow us to consistently de lever Gulfport and care to our client families delivering premier experiences during very difficult times.
Carlos Casado: They are the heartbeat of our performance and the reason why we continue to turn vision into value.
Carlos Casado: Thank you to everyone for all that you do.
Carlos Casado: Today.
Carlos Casado: I will walk you through key financial highlights and the progress of some of our most important initiatives.
Carlos Casado: Then John will provide additional insight into our cost structure.
Carlos Casado: Cash flow and GAAP numbers, focusing on these your tax benefit and leverage ratio.
Speaker Change: Let's begin with the financial results.
For the first quarter, we reported total revenue of 107 1 million.
Speaker Change: An increase of $3 6 million or three 5% compared to the same quarter last year.
Speaker Change: The breakdown of total revenue is as follows.
Speaker Change: Total funeral operating revenue ended at $69 1 million, an increase of 3 million or four 6% over the same period last year.
Speaker Change: This growth was driven by an increase in funeral home average revenue per contract of one 8% or $103 per contract.
Speaker Change: And an increase in funeral home admin volume of two 4% or 200, and maybe two contracts.
Speaker Change: As previously communicated we observed a shift in the flu season.
Moving some of the volume we would typically expect to see in the fourth quarter to the first quarter.
Speaker Change: If we look back on a comparable basis.
Speaker Change: The fourth quarter of 2024 was down five 3% in volume compared to 2023.
Speaker Change: Effectively creating a positive variance of seven 7% compared to the first quarter of 2025.
Speaker Change: Moreover, comparing funeral home I need volumes of the fourth quarter of 'twenty 'twenty four to the first quarter of 2025 on a same store basis we.
Speaker Change: We saw an increase of 1435 calls or 13, 5% in the first quarter of this year.
Speaker Change: We estimate.
Speaker Change: That only a portion of the first quarter's volume is related to the flu season shift.
Speaker Change: Typically the first quarter of the year represents our highest funeral home volume.
Speaker Change: We ended the quarter with total cemetery revenue of 27 9 million.
Speaker Change: An increase of 1.5 million or five 8%.
Speaker Change: While these performance represent strong growth for cemeteries, we expect our year over year Preneed cemetery growth rate to be between 10 and 20% for this segment of our business.
Speaker Change: During our last call I mentioned that we have been working through several strategic cemetery development projects involving a handful of our top performing cemeteries.
Speaker Change: We expect these projects to be fully completed shortly and return to our expected growth rate range during the second quarter.
Speaker Change: We generated total financial revenue of 7.4 million during the first quarter, an increase of 613000 or nine 1%.
Speaker Change: This increase was primarily driven by your strong preneed insurance funeral sales strategy and the preneed film commissions income that is generated from these sales.
Speaker Change: To showcase these growth we finished the quarter with 2541 net pre need insurance contracts, an increase of 332 contracts or 15% compared to the same quarter last year.
Speaker Change: We are excited about the progress made through our insurance preneed funeral strategy and we look forward to continued execution this year.
Speaker Change: Moving to adjusted consolidated EBITDA we.
Speaker Change: We ended at 32 9 million for the first quarter.
Speaker Change: A decrease of 653000 or one 9%.
Speaker Change: Adjusted consolidated EBITDA margin was 38%.
Speaker Change: A decrease of 170 basis points compared to last year.
Speaker Change: This decrease was primarily driven by the planning investment in their Trinity system, which for this quarter was 800000 and an additional 800000 from our field leadership development efforts invest it in our managing partners Forum aimed at elevating the skills and performance of these outstanding Lee.
Speaker Change: <unk>.
Speaker Change: We do not adjust for either of these two expenses.
Speaker Change: However, the good news is that our adjusted diluted EPS for the first quarter was 96 cents per share an increase of 21 says or 28% compared to the prior year quarter.
Speaker Change: We are excited about the progress made during the first quarter and as we reflect on our strong financial results. It is natural to consider whether or not date to our full year guidance he's weren't.
Speaker Change: Our results certainly pointing in a positive direction and showcase the strength of our strategy and disciplined execution across carriage.
Speaker Change: However.
Speaker Change: While we are encouraged by our momentum we also recognize that the broader economic environment continues to be uncertain.
Speaker Change: The U S economy continues to send mixed signals regarding market volatility inflation and recession concerns.
Speaker Change: These remind us to stay focus discipline and for thinking.
Speaker Change: With that in mind, we believe the most responsible course of action is to maintain our current guidance for now.
Speaker Change: This does not reflect any lack of confidence in our performance is quite the opposite.
Speaker Change: It demonstrates our commitment to being thoughtful and prudent stewards of the company.
Speaker Change: Ensuring we remain agile and prepare in these dynamic economic environment.
Speaker Change: April trends have remained strong we continue to closely monitor our performance.
Speaker Change: If our current momentum holds throughout the second quarter, we expect to raise guidance accordingly.
Speaker Change: Always our commitment remains to execute with the same strategic discipline and operational excellence that drove our strong first quarter results.
Speaker Change: We will continue to build on this foundation and create lasting value for our shareholders.
Speaker Change: Moving to updates on our strategic objectives.
Speaker Change: Our Trinity system is in phase one of implementation.
Speaker Change: Which is primarily related to back office systems.
Speaker Change: Phase two should begin in the third quarter.
Speaker Change: We're in the final stages of testing and are excited about the benefits and synergies Trinity will deliver.
Speaker Change: We will report more on our progress throughout the year.
Speaker Change: On the supply chain front, we have successfully launched our new earn car line.
Speaker Change: You step in optimizing procurement, improving margins and a strengthening our national partnerships, while delivering a better experience for our families through better offerings and a more thoughtful presentation of options.
Speaker Change: As we enter the next phase we're excited about the rollout of our express fetal funding partnership, which will simplify insurance assignment processes improve family's financial flexibility and unlock new self potential across all funeral homes.
Speaker Change: Future supply chain faces will focus on our gasket Coraline fleet management and other essential procurement categories.
Speaker Change: Which will help us reduce complexity drive cost efficiency and elevate service delivery across all businesses.
Speaker Change: These initiatives are part of a broader continuous improvement strategy.
Speaker Change: Which is now embedded into our daily operations.
Speaker Change: If you have not had the chance yet I strongly encourage you to read our 'twenty 'twenty four shareholder letter.
Speaker Change: It captures the foundation, we have built over the past two years.
Speaker Change: Outlines our current strategic focus.
Speaker Change: And most importantly charts, a clear path forward through our ambitious 2030 vision.
Speaker Change: It position carriage for sustainable growth and long term value creation.
Speaker Change: You can find our shareholder letter on the carriage website.
Speaker Change: In closing we are proud of our strong first quarter results. They reflect the strength of our strategy the power of our culture and the relentless execution of our high performance teams.
Speaker Change: This momentum results from our clear vision disciplined leadership and an unwavering commitment to excellence.
Speaker Change: We are redefining how value is created in our profession operational excellence innovation and a deep passion for service are not aspirations.
Speaker Change: They are the actions that consistently de lever premier experiences to the families we serve and unlock sustainable value for our shareholders.
As we move forward, we do so with confidence vocals in that ball vision of the future.
John: Thank you for your continued trust and believing carriage I will now turn the call over to John.
John: Thanks, Carlos and good morning, everyone. We're glad to have you with US today. After just over three months of carriage I feel incredibly fortunate to be part of such a talented team.
John: It's meaningful to work for a company so focus on providing the very best experience to families who trust us in their most personal and challenging moments.
Carlos Casado: As Carlos mentioned, we're very pleased with our first quarter performance.
John: It's a strong start.
John: And we're energized by the momentum heading into the rest of the year, while the macro environment may be a bit unpredictable, we're staying laser focused on what we can control and pushing forward with our key initiatives.
John: So let's dive into the first quarter results.
John: First quarter GAAP net income was $20 9 million, an increase of $13 9 million or 200.1%.
John: The variance is primarily driven by nonrecurring expense that occurred in 2024, specifically professional service expense related to the review of strategic alternatives as well as severance and separation expenses, coupled with discrete benefit in the first quarter of 2000 and twenty-five associated with a tax windfall for shares vesting at a higher.
John: Then their grant value.
The effective tax rate in the first quarter of 2025 compared to the first quarter of 2024 is close to a 15 point benefit in the rate, which also benefited diluted EPS ending the first quarter at $1.34, an increase of 89 cents per share or 197.8% moving on to cash flow statement.
John: Cash provided by operating activities for the quarter was $13 8 million, which was down $5 9 million from the prior year quarter of $19 7 million.
John: The change in value year over year is primarily driven by changes in working capital adjustment, specifically reductions in accounts payable and accrued liabilities.
John: Turning to capital expenditures for the first quarter.
We had total capital expenditures of $3 2 million compared to $3 6 million in the prior year first quarter.
John: We invested $1 8 million in growth Capex, and 1.4 million and maintenance Capex.
John: We also spent 1.9 million per project training in the first quarter based on Capex spend our adjusted free cash flow for the first quarter was $13 4 million, which was down $5 1 million from the prior year quarter of $18 5 million, we paid $17 million towards our outstanding debt this quarter ending with a maintain leverage ratio of 4.2 times from five times at the.
John: End of the first quarter of 2024, we experienced a reduction in interest expense for the quarter of 1.4 million due to the amendment of our credit facility in 2024, as well as lower outstanding balance on the facility at quarter end, our credit facility at 120 million drawn.
John: Now shifting to overhead.
John: Overhead was $15 3 million for the first quarter compared to $19 4 million in the prior year first quarter, resulting in a 4.1 million decrease in our overhead expenses.
John: Higher year first quarter had $6 6 million in special items, primarily associated with professional service expense related to the review of strategic alternatives as well as severance and separation expense.
John: If we were to remove those expenses adjusted overhead in the prior year first quarter was $12 7 million or $2 6 million lower than the current year. The 2.6 million overhead variance was primarily driven by $800000 related to project Trey.
John: $1000 related to the managing partner Forum.
John: $600000 related to payroll tax expense, primarily associated with vesting of prior year grants.
John: And 530000 related to onetime nonrecurring miscellaneous expenses.
John: Of these expenses, we anticipate approximately $1.9 million to be nonrecurring and $800000 specifically the managing partner for them to be an expense that happens annually overheads as a percentage of revenue was 14, 3% for the first quarter of 2025, which is 200 basis points higher than our adjusted overhead percentage.
John: Of 12, 3% in the first quarter of 2024.
John: If we exclude costs associated with expected nonrecurring expenses.
John: Overhead as a percentage of revenue would be 12, 5%, which is in line with our prior year and our communicated range.
John: Now, let's shift to the outlook for 2025 is.
John: As Carlos indicated we are maintaining our previously disclosed outlook as we continue to navigate the macro environment and fully expect to increase our outlook. After our second quarter results provided current momentum continues.
John: As a reminder, our outlook includes the impact of plain divestitures, but does not take into consideration any impact associated with acquisitions.
John: As a reminder, our outlook for the following metrics, where revenues are expected to be in the $400 million to $410 million range.
John: Adjusted consolidated EBITDA is expected to be in the range of $128 million to $133 million.
John: Adjusted diluted EPS of $3 10 says to $3.30 overhead expense to be in the 13% to 14% of revenue range adjusted.
John: Adjusted free cash flow in the range of $40 million to $50 million.
John: That concludes our prepared remarks, and I turn it back over to the operator to open it up for questions.
Speaker Change: Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again that is star one to ask a question on pause for just a moment to allow everyone an opportunity to signal.
Speaker Change: And we can take our first question from Alex Paris with Barrington Research.
Alex Paris: Hey, guys. Thanks for taking my questions and congrats on the strong start to the new year.
Speaker Change: Good morning, Alex Good morning.
Alex Paris: Good morning.
Alex Paris: So I'll start with the funeral.
Alex Paris: The funeral segment.
Which was up as expected.
Alex Paris: Particularly given your comments on the last call that January and February were up.
Speaker Change: First question, how was March and April I think you kind of implied in your AR.
Speaker Change: Overview comments that April continued Cheyenne as well.
Speaker Change: Yeah. The momentum has continued the same from January all the way through April.
Speaker Change: But he's draw on the funeral home side are mainly related to volume increase on a year over year basis and in some.
Speaker Change: No.
Speaker Change: 150 to 200 basis points related to our average revenue per contract.
Speaker Change: Gotcha.
Speaker Change: And.
Speaker Change: The strength year over year.
Speaker Change: Does this suggest that the COVID-19 hangover is behind us.
Speaker Change: That's a good question Alex engine or is it a little challenging to to forecast that we have two questions. One is the ones you just ask the second one is with the flu season shifts we have experienced easier we will continue to be the new seasonality on flu season, we've fought.
Speaker Change: A word that asked or we don't really know, but as it relates to two Colby, we having you know speaking about it for quite a long time, even if you take up.
Speaker Change: The number of of beds coming from COVID-19, and then you accounted for a reduction in or negative volume over the last few years, you should pretty much Gulf War for a wash off moving forward for this year are we truly believe this is a year that levels out that there should be a wash up and eventually.
Speaker Change: The increase of volume going forward.
Speaker Change: And that's really what we have forecasted in our guidance.
Speaker Change: Great.
Speaker Change: And then.
Speaker Change: On the cemetery side.
Speaker Change: Preneed internment rates sold were down in the quarter year over year.
Speaker Change: It was a similar situation over at your largest competitor service Corp. I saw the press release last night that they also had a decline in preneed.
Speaker Change: Copyright sold.
Speaker Change: What do you what do you first of all it looks like Q1, its usually a smaller quarter seasonally for preneed internment rates so selling in looking back over the last couple of years do you so seasonality.
Speaker Change: It could be one explanation for that decline a tough comp you know as well since that business has really ramped up over the last few years.
Speaker Change: But also something you referred to in your preferred.
Speaker Change: Repair comments, he kind of economic uncertainty.
Speaker Change: To what do you attribute the decline in print.
Preneed in terminal Rachel.
Speaker Change: No we have not seen a decline of preneed cemetery revenue coming from Preneed Cemetery sales related to these consumer spending we have not seen that as a matter of fact, we have seen is an expansion of our.
Speaker Change: How about your revenue per contract, but you've been on the cemetery side.
Speaker Change: What we attribute the decline or are these deceleration because so a pretty significant growth we had a pretty decent growth in preneed cemetery sales on a year over year basis.
Speaker Change: But what we have seen is.
Speaker Change: May of available inventory in two of our premier cemeteries behalf.
And particularly one which is in California and during the Qing Ming season, Our Asian community really go with some by tremendous amounts of property out of the cemetery.
Speaker Change: And we took a little bit of time, you know I mentioned last call. We had seen call I don't see that advice cemeteries that took us a little longer to get the permits to go to the cemetery development.
Speaker Change: But now we're back on track with that and we believe we will return to our normal 10% to 20% Preneed cemetery growth on a year over year basis, starting in the second quarter of this year.
Speaker Change: Great that was helpful. And then I had a question about the divestitures in the quarter and in the press release you talked about.
Speaker Change: Proceeds of $18 7 million and a gain of $5 8 million on those sales. The question is.
Speaker Change: Is this the $7 9 million in revenue in the $2 3 million in EBITDA that you talked about in your guidance.
Speaker Change: Revenue was solid revenue and EBITDA associated with the properties held for sale or are there other things left to sell in that.
Speaker Change: That bundle.
Speaker Change: Yeah I'll just handle the question in regards to the guidance. If this is a portion of that guidance, we still have another property.
Speaker Change: It looks like to divest.
Speaker Change: The second quarter, but we're aligned with kind of the seven.
Speaker Change: $7.9 million, where we expect that to be a good number of what we.
Speaker Change: Mrs.
Speaker Change: And then Alex just to follow up on John's point, there are some additional opportunities. We're looking at that are noncore assets.
Speaker Change: We feel good about in terms of having the opportunity to divest later this year.
Speaker Change: The thing that we're really excited about and want to highlight is when you look at the last 16 months we have.
Speaker Change: We essentially sold about so.
Speaker Change: Let's call it.
Speaker Change: $7 million with an EBITDA, we've raised about 31 million of proceeds during that time, we've increased top and bottom lines.
Speaker Change: So as we return to acquisitions the.
Speaker Change: The organic growth engine of carriage is very strong right now and has been able to make up for the fact that we've actually had fewer businesses in the past year. Despite growing the company as we are able to add some more premier businesses through acquisition, which we intend to do this year and we can combine those two things together, that's where we think we accelerate growth for the shareholders moving forward. So it's a big part of our <unk>.
Speaker Change: Sorry.
Speaker Change: That's a great segue for my final question.
Speaker Change: You are with the significant improvement in your balance sheet and your targets for year end, our net leverage.
Speaker Change: Got it.
Speaker Change: When do you expect it sounds like it I think you even said it unless you expect to do some M&A this year.
Speaker Change: Right.
Speaker Change: Scale.
Speaker Change: Timing I am curious about should we expect to see it in the third quarter the fourth quarter.
Speaker Change: Yeah. So we're we're talking to a number of owners right now and again just kind of go back. When you would you think about those 16 months and $38 million of proceeds we do intend to reinvest some of those in higher quality EBITDA producing businesses and expect to be able to share more about that in Q3, and then again in Q4 as well.
Speaker Change: Back half of this year.
Speaker Change: There'll be more to report there, but excited to be able to add acquisitions back to the value creation story for carriage.
Speaker Change: Great. Thanks for the additional color and Oh I'll get back into the queue. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from John <unk> with Sidoti and company.
Speaker Change: Hi, Good morning, good morning, Thanks for taking the questions.
Carlos Casado: Carlos I'm curious about your opinion I know in the first quarter, we had quite Derrick.
Carlos Casado: Conditions I'm curious about your opinion about vaccine T and how you think that's playing out and impacting your business.
Speaker Change: I'll just I don't I don't think I don't hear managing partners funeral directors nobody of our teams speaking around vaccine fatigue or army of pandemic related issues.
Speaker Change: Truly believe is just a function of our strategy. Our plan. The changes we have made to our to our core line. The changes we have made to our pricing structure of the changes were made to the corporate model, we have our operating model as well and we've been executing on those now for probably about two years and it seems like the momentum is.
Speaker Change: Continue to pick up in two.
Speaker Change: We continue to execute at a better pace. So I don't think it's related to those items at all.
Speaker Change: Okay Fair enough and can you just remind me what cost saving measures you are currently engaged in.
Speaker Change: If any the timing of the completion and and would that be completed this year or not.
John: Yes, John.
John: A few things just on the supply chain focused fraud, so right now.
John: We completed last year moving into this year.
John: P processes around insurance assignments, Ernst caskets, so really the big ticket items for us.
John: We're working on a few things right now with websites and surveys that we think will result in meaningful savings, we'll have better insight into what those dollars look like next quarter and as Carlos mentioned in his remarks, you'll fleet fleet is a big area for us and so we've already seen material savings with them.
John: Broach to fleet we have.
John: Around 800 vehicles, so for us that's an opportunity we continue.
John: To focus on so that's over the next quarter to two quarters, that's where our focus remains and will continue to grow on that as the year concludes.
Speaker Change: And just to add more to that John what's what's really exciting is that we are on the on the early stages of recognizing some of those savings in our core line is being rolled out across the board that carriage, but doesn't mean that it is fully executed in every single business again, it takes time for field trainers to adapt to change.
Speaker Change: And meaningful savings will continue to be realized order to order through the end of this year. So we're really excited about those savings.
Speaker Change: Got it.
Carlos Casado: Carlos I can appreciate the.
Carlos Casado: Measure of caution given consumer sentiment.
Carlos Casado: I guess two questions can be cognizant kind of remind us of how.
Carlos Casado: Carriage you.
Carlos Casado: Reacted in previous recessions and what kind of levers you anticipate pulling should should go into a recessionary environment.
Carlos Casado: Yeah. So as you know John you've been following this industry for quite a while is quite a resilient industry and any years of existence have shown through recession and depression Time's up continues to be pretty strong and it is a good place to invest during these times because of course that continues to occur and does.
Carlos Casado: Stop.
Carlos Casado: People were saying that most likely then families will stop spending money on on celebration of life in gaskets and things like that but you know authorization or whether it wasn't thus a nave or.
Carlos Casado: Any recession, we experienced lately, we have not seen that decline the only thing that becomes perhaps a bit more difficult is it brainy side. However.
Carlos Casado: In my experience on sales over the many years I've been in this industry now, it's it's pretty clear to me that he just a numbers game. So for example, you before you had to talk to let's just say 10 families to sell when Preneed Cemetery contract. All it means is now maybe you need to talk to 15 families to sell one preneed cemetery contract.
Carlos Casado: And so all we do is just accelerating plan for lead generation programs that deliver those numbers to continue to fulfill our goals, who are 10% to 20% growth on a year over year basis on preneed property and so that's really all I have seen and I haven't seen in the Abbvie and in this industry now are two recessions.
Carlos Casado: So.
Carlos Casado: I'm pretty sure all about it.
Carlos Casado: Great.
Carlos Casado: Thanks for the color costs I appreciate it.
Carlos Casado: Okay. Thank you Joe.
Carlos Casado: Thank you.
Speaker Change: Our next question comes from George Kelly with Roth Capital Partners.
George Kelly: Hey, everybody. Thanks for taking my questions and congrats on a strong quarter.
George Kelly: First just a follow up to one of the prior questions. How how big is the property you're contemplating monetizing <unk> and can you just sort of ballpark like what could the proceeds be from that.
George Kelly: Yeah, So I would say in Q2, George probably around $6 million.
George Kelly: And proceeds at this at this point some of that is contingent on closing conditions and timing, but I think 6 million is a good number for Q2.
Speaker Change: And that sale is already factored into your guidance.
George Kelly: Yes, yes.
George Kelly: Okay understood and then second question for you on.
George Kelly: The cemetery business.
George Kelly: I appreciate all the detail on the various capex projects.
George Kelly: <unk> been underway.
George Kelly: It sounds to me like you're already seeing a return to that 10% to 20% growth is.
George Kelly: Is that a fair statement.
George Kelly: Big uptick sequentially and you had such a great Q2 last year.
George Kelly: So just wanting to make sure like what is your visibility on that 10% to 20% as soon as Q2 and then maybe secondarily. There my understanding is there is another big project underway.
George Kelly: A different property on the east coast.
Speaker Change: And what stage of <unk>.
George Kelly: Completion is that project.
George Kelly: So we feel pretty strong about being able to come back to that 10% to 20% on the second quarter. You know we ended up at five 2% preneed property sales over the previous quarter in the first quarter of this year, which is actually four for most of it there is a pretty decent amount of growth more than offset that I know for sure. However.
George Kelly: Most of the early.
George Kelly: Early stages of cemetery sales strategy carriage has only been in five years. We believe we have a little a little bit of a longer runway than most companies and so that's where my confidence comes from and from knowing the amazing job. Our sales teams led by say importance are doing them.
George Kelly: Trading strategy that creates the regeneration programs and the training and recruiting and everything that's related to two successful sales team in this industry.
George Kelly: So those properties. The one you referred to in the east have actually started to.
George Kelly: Complete their developments and so I have no concerns over that as a matter of fact I would share that good news we have from from that specific business in terms of Preneed cemetery sales in the month of April already and on the one in the West Coast.
George Kelly: Now, what what really slows down was not being able to sell a preneed cemetery or reaching me in this community where last year. They had a very weak month.
George Kelly: And so this year, we couldn't do that because the Asian communities on them by Redeveloped property for the most part they they'd like to see it.
George Kelly: The goal to celebrate and more in their deaths.
And then they go in.
George Kelly: And purchased property that they see and so since now that pass and he's under you know Q1 for the most part there'll be a little bit of that in April we still feel pretty strong about aprils performance.
George Kelly: I have no concerns on being able to sell three developing in those properties going forward and for the remaining of this year. So that's where the confidence comes from George.
George Kelly: Okay. That's real helpful. And then maybe just one last one.
Speaker Change: On the other side of the business on the funeral side of the business just wanted to make sure I understood your comment.
Speaker Change: So what you've seen in April is a continuation of kind of call it low single digit.
Speaker Change: Pricing and low single digit volume growth is is that right.
Speaker Change: That is correct. It is positive certainly different than we have seen over the last almost three years as COVID-19, and so it looks it looks pretty strong very positive in <unk>.
Speaker Change: I'm excited about that.
Speaker Change: Okay.
Speaker Change: I have one more quick one.
Speaker Change: Apologies, if I missed it any kind of expected tariff impact.
Speaker Change: Thanks, George No pharmacy significance perspective, no. We don't we don't think that tariffs kind of impact does.
Speaker Change: Significantly this year.
Speaker Change: If you look at our merchandise cost is a small percentage or an immaterial percentage is going to be associated with.
Speaker Change: Stuff that we import.
Speaker Change: So when we looked and did an analysis.
Speaker Change: <unk> impact will be less than 10 basis points and that's on a full year basis. So that's significant.
Speaker Change: Okay excellent. Thank you very much.
Joe: Thank you Joe.
Speaker Change: It does appear that we have no further questions at this time, Mr. Cassata I will turn the call back to you for any additional or closing remarks.
Speaker Change: Thank you everybody and as we look ahead, we remain confident in our momentum and focus on driving continued growth innovation and a long term value creation we.
Speaker Change: We appreciate your continued support and look forward to sharing our progress in our next call. Thank you everybody.
Speaker Change: This concludes today's call. Thank you for your participation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].