Q1 2026 Carriage Services Inc Earnings Call

May 7, 2026

Operator: Good day, and thank you for standing by. Welcome to the Carriage Services Q1 2026 earnings webcast. I would now like to hand the conference over to your speaker today, Steve Metzger, President. Please go ahead, sir.

Speaker #3: I would now like to hand the conference over to your speaker today, Steve Metzger, President. Please go ahead, sir.

Speaker #2: Good morning, everyone, and thank you for joining us to discuss our first quarter results. In addition to myself, on the call this morning for management are Carlos Quezada, Chief Executive Officer and Vice Chairman of the Board of Directors, and John Enwright, Senior Vice President and Chief Financial Officer.

Steve Metzger: Good morning, everyone, thank you for joining us to discuss our Q1 results. In addition to myself, on the call this morning for management are Carlos Quezada, Chief Executive Officer and Vice Chairman of the Board of Directors, John Enwright, Senior Vice President and Chief Financial Officer. 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 includes supplemental financial information, including the reconciliation of differences between GAAP and non-GAAP financial measures. Today's call will begin with formal remarks from Carlos and John, will be followed by a question-and-answer period. 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 #2: 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 includes supplemental financial information, including the reconciliation of differences between GAAP and non-GAAP financial measures.

Speaker #2: Today's call will begin with formal remarks from Carlos and John, and will be followed by a question-and-answer period. 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.

Steve Metzger: 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. Forward-looking statements inherently involve risks and uncertainties and only reflect our views as of today. 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. Thank you all for joining us this morning. Now I'd like to turn the call over to Carlos.

Speaker #2: Forward-looking statements inherently involve risks and uncertainties, and only reflect our views as of today. 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.

Steve Metzger: Forward-looking statements inherently involve risks and uncertainties and only reflect our views as of today. 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. Thank you all for joining us this morning. Now I'd like to turn the call over to Carlos.

Speaker #2: Thank you all for joining us this morning, and now I'd like to turn the call over to Carlos.

Speaker #3: Thank you, Steve. And welcome to everyone joining us for today's first quarter earnings call. We're pleased with our first quarter performance, especially against a strong comparison to the first quarter of 2025.

Carlos Quezada: Thank you, Steve, and welcome to everyone joining us for today's Q1 earnings call. We're pleased with our Q1 performance, especially against a strong comparison to the Q1 of 2025. Our results reflect steady execution, discipline, and continued focus on what we can control. As I step back and look at our progress, I am encouraged by the consistency we're building across the businesses. We are strengthening our foundation, improving how we operate, and positioning Carriage for long-term value creation. Before turning to financials, I want to recognize our managing partners, our field teams, and our Houston Support Center. You are the heartbeat of Carriage. These results are not by chance. They are built on a clear vision, high standards, a strong accountability, and a deep passion for this profession. Thank you for living our values and for delivering premier experiences to the families every day.

Speaker #3: Our results reflect steady execution, discipline, and continued focus on what we can control. As I step back and look at our progress, I am encouraged by the consistency we're building across the businesses.

Speaker #3: We are strengthening our foundation, improving how we operate, and positioning CARRIAGE for long-term value creation. Before turning to the financials, I want to recognize our managing partners, our field teams, and our Houston support center.

Carlos Quezada: Before turning to financials, I want to recognize our managing partners, our field teams, and our Houston Support Center. You are the heartbeat of Carriage. These results are not by chance. They are built on a clear vision, high standards, a strong accountability, and a deep passion for this profession. Thank you for living our values and for delivering premier experiences to the families every day.

Speaker #3: You are the heartbeat of CARRIAGE. These results are not by chance. They are built on a clear vision, high standards, a strong accountability, and a deep passion for this profession.

Speaker #3: Thank you for leaving our values and for delivering premier experiences to the families every day. Today, we'll cover our first quarter performance and share three key phases of our journey: where we were, where we are today, and most importantly, where we are going.

Carlos Quezada: Today, we'll cover our Q1 performance and share three key phases of our journey: where we were, where we are today, and most importantly, where we are going. John will then walk through our financial details, including cash from operating activities, balance sheet strength, capital expenditures, overhead, and our at-the-market offering program. Now to my report. For Q1, we reported revenue of $106.1 million, a 0.9% decrease from the same period last year. The primary reason for this variance was a decline in funeral home admit volume of 5.8%. As you may remember, we had a strong Q1 last year due to the flu season pushing into January and February.

Speaker #3: John will then walk through our financial details, including cash from operating activities, balance sheet strength, capital expenditures, overhead, and our at-the-market offering program. Now to my report.

Speaker #3: For the first quarter, we reported revenue of $106.1 million, a 0.9% decrease from the same period last year. The primary reason for this variance was a decline in funeral home admit volume of 5.8%.

Speaker #3: As you may remember, we had a strong first quarter last year, due to the flu season, pushing into January and February. After normalizing funeral volume by combining the fourth quarter of 2025 and the first quarter of 2026, the actual volume decline is only 2.3%.

Carlos Quezada: After normalizing funeral volume by combining the Q4 2025 and the Q1 2026, the actual volume decline is only 2.3%. As we look at our segments, Funeral comparable revenue was $63.3 million, down 4.2% from the previous year. The volume decline was partially offset by a small 1.6% increase in comparable average revenue per contract versus the prior year quarter. As we look ahead to April, we expect funeral volume to be on a normal trend. Turning to comparable Cemetery revenue, we generated $29.6 million in the Q1, an increase of $1.7 million or 6% versus the prior year quarter.

Speaker #3: As we look at our segments, funeral comparable revenue was $63.3 million, down 4.2% from the previous year. The volume decline was partially offset by a small 1.6% increase in comparable average revenue per contract versus the prior year quarter.

Speaker #3: As we look ahead to April, we expect funeral volume to be on a normal trend. Turning to comparable cemetery revenue. We generated $29.6 million in the first quarter, an increase of 1.7 million or 6% versus the prior year quarter.

Speaker #3: This growth was primarily driven by a 9% increase in comparable pre-need cemetery sales production, and a 15.3% increase in average revenue per property contract.

Carlos Quezada: This growth was primarily driven by a 9% increase in comparable pre-need cemetery sales production and a 15.3% increase in average revenue per property contract. The cemetery segment continues to benefit from our disciplined inventory development and strategic pricing and focused pre-need execution. Financial revenue for the quarter was $8.5 million, up 15.7% year over year, primarily reflecting a strong performance in our pre-need funeral sales strategy and the pre-need funeral commission income we generated from those sales. We ended the quarter at $2.5 million, an increase of 26% compared to the same period last year. Consolidated pre-need funeral insurance contracts sold increased 8% compared to the same quarter last year, reinforcing the strength and the scalability of our funeral pre-need insurance platform, supported by the continued execution of our sales organization.

Speaker #3: The cemetery segment continues to benefit from our disciplined inventory development, a strategic pricing, and focused pre-need execution. Financial revenue for the quarter was $8.5 million, up 15.7% year over year.

Speaker #3: Primarily reflecting a strong performance in our pre-need funeral sales strategy, and the pre-need funeral commission income, which is generated from those sales. We ended the quarter at $2.5 million, an increase of 26% compared to the same period last year.

Speaker #3: Consolidated pre-need funeral insurance contract sold, increased 8% compared to the same quarter last year. Reinforcing the strength and scalability of our funeral pre-need insurance platform, supported by the continued execution of our sales organization.

Speaker #3: On profitability, adjusted consolidated EBITDA for the first quarter was $33.8 million, an increase of 805,000 or 2.4%, with an adjusted consolidated EBITDA margin of 31.8%, up 100 basis points from the prior year quarter.

Carlos Quezada: On profitability, adjusted consolidated EBITDA for Q1 was $33.8 million, an increase of $805,000 or 2.4%, with an adjusted consolidated EBITDA margin of 31.8%, up 100 basis points from the prior year quarter. Adjusted diluted EPS for Q1 was $0.86 per share compared to $0.96 per share in the prior year quarter, representing a decrease of $0.10 per share or 10.4%. John will share more details on this variance. Overall, we're pleased with our Q1 results, which reflect a strong operating momentum and continued progress towards our strategic objectives. Let's talk about where we were. 3 years ago, the company was operating under constraints: elevated leverage, fragmented processes, and underinvestment in core systems and technology. Operational variability across locations limited scalability.

Speaker #3: Adjusted diluted EPS for the first quarter was $86 cents per share, compared to $96 cents per share in the prior year quarter. Representing a decrease of $0.10 per share or 10.4%.

Speaker #3: John will share more details on this variance. Overall, we're pleased with our first quarter results, which reflect a strong operating momentum and continued progress towards our strategic objectives.

Speaker #3: Now let's talk about where we were. Three years ago, the company was operating under constraints: elevated leverage, fragmented processes, and underinvestment in core systems and technology.

Speaker #3: Operational variability across locations limited scalability, pricing discipline, was inconsistent, and capital allocation lacked the rigor required to optimize returns. In short, our company had strong underlying assets but was not positioned to fully convert that potential into durable financial performance.

Carlos Quezada: Pricing discipline was inconsistent, and capital allocation lacked the rigor required to optimize returns. In short, our company had strong underlying assets but was not positioned to fully convert that potential into durable financial performance. Today, the business reflects a fundamentally different operating profile. We have materially strengthened the balance sheet, reduced leverage, and enhanced liquidity. At the same time, we have institutionalized processes across operations, implemented more disciplined pricing frameworks, and invested in systems and data infrastructure to improve visibility, accountability, and decision-making. These changes are translating strategy into disciplined execution, driving greater sales predictability, expanding margins, and delivering consistent free cash flow. Importantly, we continue to build a culture of operational excellence that is embedded, repeatable, and scalable across our businesses. An example of this is that 2025 marked the strongest financial performance in Carriage's 35-year history, surpassing even 2021 results during the peak of the pandemic.

Speaker #3: Today, the business reflects a fundamentally different operating profile. We have materially strengthened the balance sheet, reduced leverage, and enhanced liquidity. At the same time, we have institutionalized processes across operations, implemented more disciplined pricing frameworks, and invested in systems and data infrastructure to improve visibility, accountability, and decision-making.

Speaker #3: These changes are translating strategy into disciplined execution, driving greater sales predictability, expanding margins, and delivering consistent free cash flow. Importantly, we continue to build a culture of operational excellence that is embedded repeatable and scalable across our businesses.

Carlos Quezada: These changes are translating strategy into disciplined execution, driving greater sales predictability, expanding margins, and delivering consistent free cash flow. Importantly, we continue to build a culture of operational excellence that is embedded, repeatable, and scalable across our businesses. An example of this is that 2025 marked the strongest financial performance in Carriage's 35-year history, surpassing even 2021 results during the peak of the pandemic.

Speaker #3: An example of this is that 2025 marked the strongest financial performance in Carriage 35-year history, surpassing even 2021 results during the peak of the pandemic.

Speaker #3: Now, where we are heading. Our focus is on compounding this progress in line with our long-term strategic objectives in 2030 vision. We are building a data-driven, high-performance platform designed to deliver sustained organic growth, margin expansion, and superior capital efficiency.

Carlos Quezada: Now, where we are heading. Our focus is on compounding this progress in line with our long-term strategic objectives and 2030 vision. We are building a data-driven, high-performance platform designed to deliver sustained organic growth, margin expansion, and superior capital efficiency. Our priorities include deepening pre-need penetration across both funeral and cemetery segments, optimizing the service mix towards higher volume offerings, expanding pricing sophistication, and leveraging technology to enhance both the customer experience and operating leverage. In parallel, we will continue to execute a disciplined capital allocation framework that balances high return investments and strategic acquisitions and shareholder returns. By 2030, our vision is to position the company as a premier best-in-class operator in the death care industry, defined by consistent top-tier margins, improved free cash flow generation, and a scalable technology-enabled operating model.

Speaker #3: Our priorities include deepening pre-need penetration across both funeral and cemetery segments, optimizing the service mix towards higher volume offerings, expanding pricing sophistication, and leveraging technology to enhance both the customer experience and operating leverage.

Speaker #3: In parallel, we will continue to execute a disciplined capital allocation framework that balances high-return investments, a strategic acquisitions, and shareholder returns. By 2030, our vision is to position the company as a premier best-in-class operator in the death care industry, defined by consistent top-tier margins improved free cash flow generation, and a scalable technology-enabled operating model.

Carlos Quezada: In parallel, we will continue to execute a disciplined capital allocation framework that balances high return investments and strategic acquisitions and shareholder returns. By 2030, our vision is to position the company as a premier best-in-class operator in the death care industry, defined by consistent top-tier margins, improved free cash flow generation, and a scalable technology-enabled operating model.

Speaker #3: We believe this strategy will drive durable long-term value creation and establish a structurally advantaged business capable of outperforming across market cycles. Finally, the at-the-market offering program is a strategic extension of the progress we have already made.

Carlos Quezada: We believe this strategy will drive durable long-term value creation and establish a structurally advantaged business capable of outperforming across market cycles. Finally, the at-the-market offering program is a strategic extension of the progress we have already made. With a stronger balance sheet, improved free cash flow, and a more disciplined, scalable operating platform, we believe we are now in a position to deploy capital with precision. This program gives us the flexibility to do that strategically, raising equity at market prices in a measured way and only when it supports high returns for shareholders. Additionally, the at-the-market program allows us to accelerate strategic growth initiatives, pursue disciplined acquisitions in a highly fragmented industry, and maintain balance sheet strength. It enables us to move faster on opportunities and convert our operational momentum into sustained shareholder value creation.

Speaker #3: With a stronger balance sheet, improved free cash flow, and a more disciplined, scalable operating platform, we believe we are now in a position to deploy capital with precision.

Speaker #3: This program gives us the flexibility to do that strategically, raising equity at market prices in a measured way, and only when it supports high returns for shareholders.

Speaker #3: Additionally, the at-the-market program allows us to accelerate a strategic growth initiatives, pursue disciplined acquisitions in a highly fragmented industry, and maintain balance sheet strength.

Carlos Quezada: Additionally, the at-the-market program allows us to accelerate strategic growth initiatives, pursue disciplined acquisitions in a highly fragmented industry, and maintain balance sheet strength. It enables us to move faster on opportunities and convert our operational momentum into sustained shareholder value creation. We are energized by our growth plans and confident in the long-term value we're building through disciplined capital execution, growth generated with purpose and intention, and an unwavering commitment to service excellence. Thank you. With that, I will turn the call over to John.

Speaker #3: It enables us to move faster on opportunities and convert our operational momentum into sustained shareholder value creation. We are energized by our growth plans and confident in the long-term value we're building through disciplined capital execution, growth-generated with purpose and intention, and an unwavering commitment to service excellence.

Carlos Quezada: We are energized by our growth plans and confident in the long-term value we're building through disciplined capital execution, growth generated with purpose and intention, and an unwavering commitment to service excellence. Thank you. With that, I will turn the call over to John.

Speaker #3: Thank you. And with that, I will turn the call over to John.

Speaker #1: Thank you, Carlos, and good morning, everyone. As Carlos mentioned, we are pleased with our first quarter results, especially considering the tough comparison to prior year, which included approximately $4.8 million in revenue from businesses that were invested during 2025.

John Enwright: Thank you, Carlos. Good morning, everyone. As Carlos mentioned, we are pleased with our Q1 results, especially considering the tough comparison to prior year, which included approximately $4.8 million in revenue from businesses that were divested during 2025. As noted in our earnings release, we are excited to announce that we established an at-the-market equity offering program, or ATM program, as a prudent enhancement to our capital markets toolkit. The ATM program is intended to provide efficient, incremental funding flexibility that enables us to continue executing our disciplined acquisition strategy while ensuring leverage remains comfortably within our targeted range. We expect to access the ATM program selectively and opportunistically, consistent with our commitment to balance sheet strength, disciplined capital allocation, and shareholder value creation. With that, let's discuss Q1 results.

Speaker #1: As noted in our earnings release, we are excited to announce that we established an at-the-market equity offering program, or ATM program, as a prudent enhancement to our capital markets toolkit.

Speaker #1: The ATM program is intended to provide efficient, incremental funding flexibility that enables us to continue executing our disciplined acquisition strategy while ensuring leverage remains comfortably within our targeted range.

Speaker #1: We expect to access the ATM program selectively and opportunistically consistent with our commitment to balance sheet strength, disciplined capital allocation, and shareholder value creation.

Speaker #1: With that, let's discuss first quarter results. We reported consolidated adjusted EBITDA of $33.8 million or $31.8% of revenue, up from $32.9 million or $30.8% of revenue of last year's first quarter.

John Enwright: We reported consolidated adjusted EBITDA of $33.8 million or 31.8% of revenue, up from $32.9 million or 30.8% of revenue of last year's Q1. Gains were driven by improved cemetery operations and pre-need funeral sales, adding $2.5 million of EBITDA. However, comparable funeral EBITDA fell by approximately $2.4 million due to lower volume within the channel this quarter, which offset the majority of those gains. For Q1 of 2026, our adjusted diluted EPS declined to $0.86, representing a 10.4% decrease from $0.96 in the prior year. The decline was primarily a result of a higher effective tax rate in this year's Q1.

Speaker #1: Gains were driven by improved cemetery operations and pre-need funeral sales, adding $2.5 million of EBITDA. However, comparable funeral EBITDA fell by approximately 2.4 million due to lower volume, within the channel.

Speaker #1: This quarter, which offset the majority of those gains. For the first quarter of 2026, our adjusted diluted EPS declined to $0.86, representing a 10.4% decrease from $0.96 in the prior year.

Speaker #1: The decline was primarily a result of a higher effective tax rate in this year's first quarter. The effective tax rate for the first quarter was 26.7% compared to 20.3% in the first quarter of 2025.

John Enwright: The effective tax rate for Q1 was 26.7% compared to 20.3% in Q1 of 2025. The adjustment in tax rate resulted in an estimated impact of $0.07 to $0.08, primarily due to higher excess tax benefits recognized in the previous year upon the settlement of employee share-based awards. On a GAAP basis, diluted EPS for Q1 was $0.84 compared to $1.34 in the same period last year. The prior year results included the benefit of a $7.9 million gain associated with a divestiture and a sale of real estate assets.

Speaker #1: The adjustment in tax rate resulted in an estimated impact of 7 to 8 cents, primarily due to higher excess tax benefits recognized in the previous year upon the settlement of employee share-based awards.

Speaker #1: On a gap basis, diluted EPS for the first quarter was $0.84, compared to $1.34 in the same period last year. The prior year results included the benefit of a 7.9 million gain associated with a divestiture and a sale of real estate assets.

Speaker #1: Moving on to cash from operating activities, we saw an increase of 1.1 million over the prior year, or an 8% increase. Primarily because of year-over-year improvement in operating results.

John Enwright: Moving on to cash from operating activities, we saw an increase of $1.1 million over the prior year or an 8% increase, primarily because of year-over-year improvement in operating results. Free cash flow in the quarter was $400,000 or 3.5% higher than the prior year Q1. Adjusted free cash flow was $2.2 million lower than the prior year Q1, as Q1 2025 was impacted by special payments for professional services related to the review of strategic alternatives, as well as severance payments. As a result of our ongoing commitment to executing disciplined capital allocation, our bank leverage ratio decreased to 4x from 4.2x at the close of Q1 2025.

Speaker #1: Free cash flow in the quarter was $400,000 or $3.5% higher than the prior year first quarter. Adjusted free cash flow was $2.2 million lower than the prior year first quarter.

Speaker #1: As the first quarter of 2025 was impacted by special payments for professional services, related to the review of strategic alternatives, as well as severance payments.

Speaker #1: As a result of our ongoing commitment to executing disciplined capital allocation, our bank leverage ratio decreased to four times, from 4.2 times at the close of the first quarter of 2025.

Speaker #1: We remain within our long-term leverage ratio target of 3.5 to 4 times. Capital expenditures for the quarter totaled $3.9 million in the first quarter of 2026, compared to $3.2 million in the prior year's first quarter.

John Enwright: We remain within our long-term leverage ratio target of 3.5 to 4 times. Capital expenditures for the quarter totaled $3.9 million in Q1 2026, compared to $3.2 million in the prior year's Q1. The $700,000 increase was predominantly associated with maintenance capital, driven by incremental spending in our funeral homes, coupled with an IT investment to refresh and improve the quality of our network connectivity within our field locations. For the quarter, we spent $2.2 million on maintenance capital and $1.7 million on growth capital. Overhead expenses for the quarter totaled $14.8 million or 14% of revenues, compared to $15.3 million or 14.3% of revenues in Q1 2025.

Speaker #1: The $700,000 increase was predominantly associated with maintenance capital, driven by incremental spending in our funeral homes, coupled with an IT investment to refresh and improve the quality of our network connectivity within our field locations.

Speaker #1: For the quarter, we spent $2.2 million on maintenance capital and $1.7 million on growth capital. Overhead expenses for the quarter totaled $14.8 million, or 14% of revenues, compared to $15.3 million, or 14.3% of revenues in the first quarter of 2025.

Speaker #1: The decrease was a result of some variable expenses, coupled with effective cost management. Moving on to our 2026 outlook. We are maintaining our previously disclosed full-year outlook.

John Enwright: The decrease was a result of some variable expenses coupled with effective cost management. Moving on to our 2026 outlook. We are maintaining our previously disclosed full-year outlook. As a reminder, our outlook anticipates certain planned acquisitions that we expect to be completed in 2026. Also, utilization of the previously mentioned ATM program have not been factored into any of our metrics in our outlook. As a reminder, our outlook for the following metrics are: revenues are expected to be in the $440 to 450 million range. Adjusted consolidated EBITDA is expected to be in the range of $135 to 140 million. Adjusted EBITDA margins between 30.5% and 31.5%. Adjusted diluted EPS of $3.35 to $3.55.

Speaker #1: As a reminder, our outlook anticipates certain planned acquisitions that we expect to be completed in 2026. Also, utilization of the previously mentioned ATM program had not been factored into any of our metrics in our outlook.

Speaker #1: As a reminder, our outlook for the following metrics are: revenues are expected to be in the $440 to $450 million range, adjusted consolidated EBITDA is expected to be in the range of $135 to $140 million, adjusted EBITDA margins between 30.5 and 31.5%, adjusted diluted EPS of $3.35 to $3.55.

John Enwright: Adjusted consolidated EBITDA is expected to be in the range of $135 to 140 million. Adjusted EBITDA margins between 30.5% and 31.5%. Adjusted diluted EPS of $3.35 to $3.55. Overhead expenses to be between 13.5% to 14.5% of revenue. Adjusted free cash flow in the range of $40 to 50 million. Leverage ratio to end 2026 between 3.5 to 4 times. That concludes our prepared remarks, and I will turn it back over to the operator to open it up for questions.

Speaker #1: Overhead expenses to be between $13.5 to $14.5% of revenue, adjusted free cash flow in the range of $40 to $50 million, leverage ratio to end 2026 between 3.5 to 4 times.

John Enwright: Overhead expenses to be between 13.5% to 14.5% of revenue. Adjusted free cash flow in the range of $40 to 50 million. Leverage ratio to end 2026 between 3.5 to 4 times. That concludes our prepared remarks, and I will turn it back over to the operator to open it up for questions.

Speaker #1: That concludes our prepared remarks, and I will turn it back over to the operator to open it up for questions.

Speaker #2: Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please signal by pressing *1 on your telephone keypad.

Operator: Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Alex Paris with Barrington Research.

Speaker #2: If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press *1 to ask a question.

Speaker #2: We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Alex Paris with Barrington Research.

Speaker #3: Hi guys. Thanks for taking my question. I got a couple. I think I'll start with funeral results which were down year over year. I get it.

Alex Paris: Hi, guys. Thanks for taking my question. I got a couple. I think I'll start with funeral results, you know, which were down year over year. I get it. Tough comp. Strong flu season a year ago. Not not too different from your large publicly traded competitor who said the same thing and had a similar comparable volume decline year over year. You reaffirmed your guidance for the full year, it's early in the year. It suggests that there should be revenue growth returning in the remaining quarters of the year. Can you comment on that or provide some additional color? Your thoughts or your confidence why revenue growth will return in the subsequent quarters?

Speaker #3: Tough comp. Strong flu season. A year ago. Not too different from your large publicly traded competitor who said the same thing and had a similar comparable volume decline year over year.

Speaker #3: But you reaffirmed your guidance for the full year. It's early in the year. And it suggests that there should be revenue growth. Returning in the remaining quarters of the year.

Speaker #3: Can you comment on that or provide some additional color? Your thoughts or your confidence why revenue growth will return in the subsequent quarters?

Speaker #4: Absolutely. Thank you, Alex, for the questions. It's a great question. We have seen in cycles, right, that death care has this cyclarity, if you will.

Carlos Quezada: Absolutely. Thank you, Alex, for the question. It's a great question. You know, we have seen in cycles, right? It has this cyclicity, if you will. It goes up and down. Normally, it's always been, you know, Q1, Q4, Q2. You know, since COVID-19, that has actually changed significantly. What we have seen is that even though Q1 may be down, it picks up some of that volume as we go throughout the year. For us, especially because we are still in the process of integrating our latest two acquisitions in Florida, and the divestiture that we did from last year also impacts that.

Speaker #4: It goes up and down. Normally, it's always been first quarter, first fourth quarter, second. But since COVID-19, that has actually changed significantly. What we have seen is that May, even though first quarter may be down, it picks up some of that volume, as we go throughout the year.

Speaker #4: For us especially, because we are still in the process of integrating our latest two acquisitions in Florida. And the divestiture that we did from last year also impacts that.

Speaker #4: As we wash off Q1, we have now passed the largest divestiture. And we feel pretty positive we will be able to make our volume up for the next three quarters.

Carlos Quezada: As we wash off Q1, we have now passed the largest divestiture, and we feel pretty positive we will be able to make our volume up for the, you know, for the next 2, 3 quarters.

Speaker #3: Good. That's helpful. And speaking of acquisitions, I was wondering if you can give us an update on the integration process with Osceola. How is it performing?

Alex Paris: Good. That's helpful. Speaking of acquisitions, I was wondering if you can give us an update on the integration process with Osceola. How is it performing? Osceola and the other acquisitions since they were acquired last September.

Speaker #3: Osceola and the other acquisitions since they were acquired last September?

Speaker #4: Yeah. Good morning, Alex. This is Steve. So yeah, both acquisitions are really trending in a positive direction. Faith Chapel over at Pensacola and then Osceola.

Steve Metzger: Good morning, Alex. It's Steve. Yeah, both acquisitions are really trending in a positive direction. Faith Chapel over at Pensacola and then Osceola, that you mentioned over in Kissimmee. Excited about the progress of both businesses. As you know, with the Osceola business, it allows us with our current footprint in that market, to really recognize some synergies that's unique for us, with acquisitions. Excited to see how that continues to move forward.

Speaker #4: That you mentioned over in Kissimmee. So excited about the progress of both businesses. And as you know, with the Osceola business, it allows us with our current footprint in that market to really recognize some synergies that's unique for us with acquisitions.

Speaker #4: So excited to see how that continues to move forward.

Alex Paris: Are these acquisitions fully integrated at this point? Are they on their common systems and things like that?

Speaker #3: Is these acquisitions fully integrated at this point? Are they on their common systems and things like that?

Alex Paris: Are these acquisitions fully integrated at this point? Are they on their common systems and things like that?

Speaker #4: Yeah. All the systems and people are fully integrated. We actually just, with Osceola, broke ground a couple of months ago with a new development in the cemetery.

John Enwright: Yeah. All the systems and people are fully integrated. We actually just, with Osceola, broke ground a couple of months ago with a new development in the cemetery, so adding some additional inventory and product for the community there. That should be finished in the next month or 2. Yeah, all systems go with Osceola and Faith Chapel in terms of integration.

Steve Metzger: Yeah. All the systems and people are fully integrated. We actually just, with Osceola, broke ground a couple of months ago with a new development in the cemetery, so adding some additional inventory and product for the community there. That should be finished in the next month or 2. Yeah, all systems go with Osceola and Faith Chapel in terms of integration.

Speaker #4: So, adding some additional inventory and product for the community there. That should be finished in the next month or two. So, yeah, all systems go with Osceola and Faith Chapel in terms of integration.

Speaker #3: Great. And then just one last one, and I'll get back in the queue. I'm wondering if you can give us a little update on the M&A pipeline and outlook.

Alex Paris: Great. Just one last one, and I'll get back in the queue. I'm wondering if you can give us a little update on the M&A pipeline and outlook. As you noted in the prepared comments, there is an acquisition assumption for likely acquisitions or potential acquisitions that might close in 2026. I think that assumption was $5 to 10 million in revenue. Just looking for a little color there.

Speaker #3: As you noted in the prepared comments, there is an acquisition assumption for likely acquisitions or potential acquisitions that might close in 2026. I think that assumption was 5 to 10 million in revenue.

Speaker #3: Just looking for a little color there.

Speaker #4: You bet. So yeah, the pipeline is robust right now. We have one acquisition that is scheduled to close later this month. It's going to allow us to enter a new market with a pretty strong growth profile.

Steve Metzger: You bet. The Yeah, the pipeline is robust right now. We have one acquisition that is scheduled to close later this month. It's gonna allow us to enter a new market with a pretty strong growth profile. We're excited to provide some more detail on that here probably in the next couple of weeks. We're having a number of conversations with owners throughout the country. We've grown the corporate development team out of need, quite frankly. We've just had a lot of interest from owners across country. I would expect in the back half of the year, we're gonna see significant activity that we'll be able to report on.

Speaker #4: So we're excited to provide some more detail on that here probably in the next couple of weeks. We're having a number of conversations with owners throughout the country we've grown the corporate development team out of need, quite frankly.

Speaker #4: We've just had a lot of interest from owners across the country. I would expect in the back half of the year, we're going to see significant activity that we'll be able to report on.

Steve Metzger: Carlos Quezada, John mentioned this, you know, one of the benefits with the ATM is being able to support what we think is gonna be a pretty significant opportunity for growth through M&A.

Speaker #4: And Carlos and John mentioned this. One of the benefits with the ATM is being able to support what we think is going to be a pretty significant opportunity for growth through M&A.

Speaker #3: So last related, with the ATM, would you think that there's the potential to exceed that 5 to 10 million dollar assumption that's baked in guidance given the greater flexibility and wherewithal?

Alex Paris: Last related, with the ATM, would you think that there's the potential to exceed that $5 to 10 million assumption that's baked in guidance, given the greater flexibility and wherewithal?

Speaker #4: Yeah. My expectation is you're going to see more activity in the back half of the year. In terms of when things close, you may see some of that bleed into early next year as well.

Steve Metzger: Yeah, my expectation is you're gonna see more activity in H2. In terms of when things close, you may see some of that bleed into early next year as well. We continue to be focused on ensuring the businesses that we're working with and we're integrating are, you know, high-value businesses, high-growth markets. We're not just gonna add businesses to add to the top line. That means probably Q3, Q4 into Q1, you'll see some significant activity. Look, I think in the next 3 or 4 quarters, this certainly plan to exceed the $10 million. Whether it hits in Q1 of next year or Q3 and Q4 this year remains to be seen.

Speaker #4: We continue to be focused on ensuring the businesses that we're working with and we're integrating are high-value businesses. High-growth markets. So we're not just going to add businesses to add to the top line.

Speaker #4: That means probably Q3, Q4 into Q1, you'll see some significant activity. And look, I think in the next three or four quarters, there's certainly plan to exceed the 10 million whether it hits in Q1 of next year or Q3 and Q4 this year remains to be seen.

Speaker #3: Great. Thank you very much. I'll get back in the queue.

Alex Paris: Great. Thank you very much. I'll get back in the queue.

Speaker #1: We will take our next question from Laura Marr with B-Riley Securities.

Operator: We will take our next question from Laura Marr with B. Riley Securities.

Operator: We will take our next question from Laura Maher with B. Riley Securities.

Speaker #5: Hi. Good morning. Thanks for taking my question. My first question, it seems the burial to cremation mix is stabilizing. How does this influence your average revenue per contract in funeral home EBITDA margins going forward?

Laura Marr: Hi, good morning. Thanks for taking my question. My first question, it seems the burial to cremation mix is stabilizing. How does this influence your average revenue per contract in funeral home EBITDA margins going forward?

Laura Maher: Hi, good morning. Thanks for taking my question. My first question, it seems the burial to cremation mix is stabilizing. How does this influence your average revenue per contract in funeral home EBITDA margins going forward?

Carlos Quezada: Do you wanna answer? Go ahead.

Speaker #4: I do you want to answer? Go ahead.

Carlos Quezada: Do you wanna answer? Go ahead.

Steve Metzger: Yeah. Yeah. We've seen over the last three quarters some normalization or some benefit associated with the cremation mix. You know, it was 40 basis points growth in this quarter. As burial kind of flattens, you should see and we should see our ARPC increase.

Speaker #3: Yeah. Yeah. So we've seen over the last three quarters some normalization or some benefit associated with the cremation mix. It was 40 basis points growth in this quarter.

Speaker #3: And as burial kind of flattens, you should see—and we should see—our ARPC increase.

Speaker #5: Great. Thanks. And then second, are there any other funeral home properties you're looking to divest?

Laura Marr: Great. Thanks. Second, are there any other funeral home properties you're looking to divest?

Laura Maher: Great. Thanks. Second, are there any other funeral home properties you're looking to divest?

Speaker #4: No. At this time, Laura, we feel pretty good about the portfolio as currently constructed. So no additional divestitures are planned.

Steve Metzger: Yeah. At this time, Laura, we feel pretty good about the portfolio as currently constructed. No additional divestitures are planned.

Speaker #5: Okay. Thank you.

Laura Marr: Okay, thank you.

Laura Maher: Okay, thank you.

Speaker #4: Thank you, Laura.

Carlos Quezada: Thank you, Laura.

Speaker #1: We will take our next question from Parker Sner with Raymond James.

Operator: We will take our next question from Parker Snurr with Raymond James.

Operator: We will take our next question from Parker Snure with Raymond James.

Parker Snurr: Hey, good morning. Just on the funeral volumes, just curious on, you know, comparable funeral volumes, how they progress through the quarter, you know, January, February, March, and then what are you seeing in early days of Q2?

Parker Snure: Hey, good morning. Just on the funeral volumes, just curious on, you know, comparable funeral volumes, how they progress through the quarter, you know, January, February, March, and then what are you seeing in early days of Q2?

Speaker #4: Hey. Good morning. Just on the funeral volumes, just curious on comparable funeral volumes, how they progressed through the quarter, January, February, March, and then what are you seeing in early days of the second quarter?

Speaker #6: Yeah. So the tough comp was really January and February. March, also came a little light to be pretty straightforward. I think the three months were pretty much the same as it comes to the decline.

Carlos Quezada: The tough comp was really January and February. March also came a little light. To be, you know, pretty straightforward, I think the 3 months were pretty much the same as it comes to the decline. April started a little slow. We do believe that with the divestiture out, may come back. We do foresee, you know, these cyclical turns of Q2, Q3, Q4 coming in to being able to make up for what Q1 is missing. That's what we have seen in years past, that's what we're, you know, really aiming to do. In addition to that, our teams see at the field level, which is what truly matters, continue to fight pretty hard for market share gains.

Speaker #6: April started a little slow. We do believe that with the divestiture out, may come back. But we do foresee these cyclical turns of Q2, Q3, Q4 coming in to be able to make up for what Q1 is missing.

Speaker #6: That's what we have seen in years past, and that's what we're really aiming to do. In addition to that, our teams at the field level, which is what truly matters, continue to fight pretty hard for market share gains.

Speaker #6: And so while there might be compression of death rates seems like it because as we talk to vendors, we see in reports from other poly companies, we see that that's probably the case.

Carlos Quezada: While there might be a compression of death rates, seems like it because as we talk to vendors, we've seen reports from other public companies, we see that's probably the case. We continue to fight pretty hard to make sure that the Carriage businesses gain as many, you know, market share gains as we can by providing, you know, premier experiences to the families that we serve and delivering on that experience to each one of those families.

Speaker #6: We continue to fight pretty hard to make sure that the carriage businesses gain as many market share gains as we can by providing premier experiences to the families that we serve.

Speaker #6: And delivering on that experience to each one of those families.

Speaker #4: Okay. Okay. Understood. And then on the pre-need cemetery production, you had strong growth there despite lower contract volume. You had better revenue per contract, just curious on the puts and takes there.

David Brown: Okay. Okay. Understood. Then on the pre-need cemetery production, you had strong growth there despite lower contract volume. You had better revenue per contract. Just curious on the puts and takes there. Were there any large ticket sales that helped drive that better product, increased pricing? Maybe just more details on the pre-need cemetery growth.

Parker Snure: Okay. Okay. Understood. Then on the pre-need cemetery production, you had strong growth there despite lower contract volume. You had better revenue per contract. Just curious on the puts and takes there. Were there any large ticket sales that helped drive that better product, increased pricing? Maybe just more details on the pre-need cemetery growth.

Speaker #4: Were there any large ticket sales that helped drive that better product? Increased pricing, maybe just more details on the pre-need cemetery growth?

Speaker #6: We have the normal large sales activity. Nothing too large that will offset that. We have been actually working really hard in making sure we have a great sales average on the pre-need cemetery side.

Carlos Quezada: We have the normal, you know, large sales activity, nothing too large that will offset that. We have been actually working really hard in making sure we have a great sales average on the pre-need cemetery side. We're hoping for a bit more, although, you know, if I go back, I'll give you some data, which I think is fascinating to me. If I go back to Q1 2019 and then calculate the CAGR to Q1 2026, pre-need sales is at 22.4% CAGR over this period, which is fantastic. For Q1 2026, what was a little light, you know, Qingming really started a little later. This year's been, you know, not great. That's what we have seen.

Speaker #6: We're hoping for a little bit more, although if I go back, I'll give you some data, which I think it's fascinating to me. If I go back to Q1 2019 and then calculate the CAGR to Q1 2026, pre-need sales is 22.4% CAGR over this period, which is fantastic.

Speaker #6: For Q1 2026, what was a little light, Qingming really started a little later this year. It's been not great that's what we have seen.

Carlos Quezada: For Q1 2026, what was a little light, you know, Qingming really started a little later. This year's been, you know, not great. That's what we have seen. Even on top of that, we're still able to deliver some pretty amazing performance in Q1. Feel pretty excited about our pipeline for pre-need business on both funeral and cemetery and I don't see why would that slow down.

Carlos Quezada: Even on top of that, we're still able to deliver some pretty amazing performance in Q1. Feel pretty excited about our pipeline for pre-need business on both funeral and cemetery.

Speaker #6: And even on top of that, we're still able to deliver some pretty amazing performance in Q1. So feel pretty excited about our pipeline for pre-need business on both funeral and cemetery.

Speaker #6: And I don't see why that would slow down.

Carlos Quezada: I don't see why would that slow down.

Speaker #4: Okay. Okay. And then just last one from me, just given the news of the ATM program, is it a reasonable expectation that you will finance the acquisitions that are built into your 26 guidance with the ATM program, or will you use a combination of that and free cash flow from this year?

David Brown: Okay. Okay. Just last one from me. Just given the news of the ATM program, is it a reasonable expectation that you will finance the acquisitions that are built into your 2026 guidance with the ATM program? Or will you use a combination of that and free cash flow from this year? Also just curious on the expected cash needs or cash outlays to complete these acquisitions.

Parker Snure: Okay. Okay. Just last one from me. Just given the news of the ATM program, is it a reasonable expectation that you will finance the acquisitions that are built into your 2026 guidance with the ATM program? Or will you use a combination of that and free cash flow from this year? Also just curious on the expected cash needs or cash outlays to complete these acquisitions.

Speaker #4: And then also just curious on the expected cash needs or cash outlays to complete these acquisitions.

Speaker #3: Yeah. So I think it might be on timing. So there might be usage of basically free cash flow, and we can fund through the ATM program.

John Enwright: I think it might be on timing, so there might be usage of basically free cash flow, and we can fund through the ATM program. To the point it depends on the size of the acquisitions is really when we would be opportunistically accessing the ATM. Really, if you just look at a typical the multiples, if from the $5 to 10 million of expected revenue, you know, our typical margins are, you know, depending on if it's funeral or cemetery, we still expect the margins or the multiples, depending on the size, to call it to be in the average range and call it six to eight times from an EBITDA multiple perspective. The cash needs will be based on that.

Speaker #3: To the point, it depends on the size of the acquisitions is really when we would be opportunistically accessing the ATM. And really, if you just look at a typical multiple from the 5 to 10 million dollars of expected revenue, our typical margins are depending on a funeral cemetery, we still expect the margins or the multiples depending on the size to call it to be an average range of call it 6 to 8 times from an EBITDA multiple perspective.

Speaker #3: So the cash needs will be based on that.

Speaker #4: Okay. All right. Helpful. Thank you.

David Brown: Okay. All right. Helpful. Thank you.

Parker Snure: Okay. All right. Helpful. Thank you.

Speaker #6: Thanks, Parker.

John Enwright: Thanks, Parker.

Speaker #1: We will take our next question from George Kelly with Roth Capital Partners.

Operator: We will take our next question from George Kelly with ROTH Capital Partners.

Speaker #4: Hey, everyone. Thanks for taking the questions. A couple for you. First, can you update us on the status of Trinity?

George Kelly: Hey, everyone. Thanks for taking the questions. A couple for you. First, can you update us on the status of Trinity?

Speaker #3: Yeah. So I'll speak to that. So Trinity, as you know, George, we're in one location right now with a second location is going to go live.

John Enwright: Yeah. I'll speak to that. Trinity, as you know, George, we're in 1 location right now, where the 2nd location is gonna go live in May. Provided that's successful, which we expect it to be successful, then we'll do a rollout of our funeral home starting in July, what we're calling Velocity. All the funeral homes, not the combos or cemeteries, but all the funeral homes should be done in 2026. We move into Q1 2027, and we expect all the combos and cemeteries to be up and live.

Speaker #3: In May, it provided that successful, which we expected to be successful, then we'll do a rollout of our funeral home starting in July. What we're calling velocity.

Speaker #3: And all the funeral homes, not the combos or cemeteries, but all the funeral homes should be done in 2026. Then we move into 2000, the first quarter of 2027, and we expect all the combos and cemeteries to be up and live.

Speaker #4: Okay. Okay. Understood. Thanks. And then second question for me, your funeral margin held in pretty well given the downtick in revenue. You commented in your prepared remarks about finding efficiencies and just being disciplined on the cost side.

George Kelly: Okay. Okay. Understood. Thanks. Then second question from me. Your funeral margin held in pretty well given the downtick in revenue. You commented in your prepared remarks about finding efficiencies and just being disciplined on the cost side. What efficiencies were you able to find, and are those things sustainable? Should we think of, you know, you being able to maintain, like, pretty easily maintain that above 40% margin? Just how should we think about those efficiencies? Can you detail any of that?

Speaker #4: What were you able to what efficiencies were you able to find? And are those things sustainable? Should we think of you being able to maintain pretty easily maintain that above 40% margin or just how should we think about those efficiencies?

Speaker #4: Can you detail that?

Speaker #3: Yeah. So in that particular channel, we saw some efficiencies on the labor side. So the labor was comparatively speaking to last year's and the first quarter down or roughly flattish, right?

John Enwright: In that particular channel, we saw some efficiencies on the labor side. The labor was comparatively speaking to last year's and Q1, down or roughly flattish, right? From a margin perspective. We saw some other expenses, some one-time expenses that may have happened last year that ultimately didn't reoccur in 2025 in Q1. When we talk about just efficiencies in general, it wasn't just within the field. We saw some efficiencies in the cemetery locations, but also in corporate, right? We made some disciplined choices this year in the corporate side to, you know, kind of manage as we saw the volume tick down, and we'll continue to do that. We'll be very thoughtful as we think about the next 3 quarters on where we can and can't spend, especially on discretionary.

Speaker #3: So from a margin perspective, and then we saw some other expenses and one-time expenses that may have happened last year that ultimately didn't reoccur in 2025 in the first quarter.

Speaker #3: When we talk about just efficiencies in general, it wasn't just within the field. We saw some efficiencies in the cemetery locations, but also in corporate, right?

Speaker #3: We made some discipline choices this year in the corporate side to kind of manage as we saw the volume take down. And we'll continue to do that.

Speaker #3: We'll be very thoughtful as we think about the next three quarters. And where we can and can't spend, especially on discretionary.

Speaker #6: Yeah, George, if you think about we saw the volume starting to come down early January and we make decisions, but just for that. And to be still being able to have adjusted consolidated EBITDA margin greater than Q1 2025 of 31.8% and up 2.4% to last year is pretty impressive.

Carlos Quezada: Yeah, George. If you think about, you know, we saw the volume starting to come down early January, we make decisions to adjust for that. You know, to be still being able to have adjusted consolidated EBITDA margin greater than Q1 2025 of 31.8% and up 2.4% to last year is pretty impressive. It speaks highly of the disciplined execution from the bottom up, business by business, and you know, leader by leader all the way through our overhead. We feel pretty proud about accomplishing that despite the volume decline.

Speaker #6: And it speaks highly of the discipline, execution from the bottom up—business by business and leader by leader—all the way to our overhead.

Speaker #6: And so we feel pretty proud about accomplishing that despite the volume decline.

Speaker #4: Okay. Okay. And then last question for me. I guess a follow-up to one of your early responses. Can you talk more about how your going after market share gains?

George Kelly: Okay. Okay. Last question from me. I guess a follow-up to one of your earlier responses. Can you talk more about how you're going after market share gains?

Speaker #6: Yeah, absolutely. Happy to do that. So one of the things we're doing at George is earlier last year, well, mid-year last year, we started to do mystery call shops.

Carlos Quezada: Yeah, absolutely. Happy to do that. One of the things we're doing, George, is earlier last year, mid-year last year, we started to do mystery call shops. Basically what that is, we start to call the funeral homes and through our company, so they can let us know how good are we at picking up the phone call, right? That matters because a significant percentage of the volume that comes through the funeral homes comes through the phone. That first call, that's why we call them calls, is because people call in and set up an appointment to go and see if that's a good funeral home for their family.

Speaker #6: So basically what that is, we start to call the funeral homes and through a company so they can let us know how good are we at picking up the phone call, right?

Speaker #6: And that matters because a significant percentage of the volume that comes through the funeral homes comes through the phone. That first call. That's why we call them calls—because people call in and set up an appointment to go and see if that's a good funeral home for their family.

Speaker #6: And so we learned that we had some opportunities for improvement and we have since then started the program to finalize training to really improve how we're answering the phone, to elevate that experience to address all the touch points we want to address through the phone call.

Carlos Quezada: We learned that we had some opportunities for improvement, and we have since then started the program to finalize training, to really improve how we're answering the phone, to elevate that experience, to address all the touch points we want to address through the phone call. You know, keeping those families more interested in staying with us than going to the competition.

Speaker #6: And in doing so, keeping those families more interested in staying with us than going to the competition.

Speaker #4: Okay. Understood. Thanks.

George Kelly: Okay. Understood. Thanks.

Speaker #6: Thanks, George.

Carlos Quezada: Thanks, George.

Speaker #1: We will take our next question from Scott Schneberger with Oppenheimer.

Operator: We will take our next question from Scott Schneeberger with Oppenheimer.

Scott Schneeberger: Thanks very much. Good morning. Just one from me. Could you guys just provide an overview of what you look for in M&A? What are some of the things that you're looking to achieve as you're in the market? Thanks.

Speaker #6: Thanks very much. Good morning. Just one for me. Could you guys just provide an overview of what you look for in M&A? What are some of the things that you're looking to achieve as you're in the market?

Speaker #6: Thanks.

Speaker #4: Yeah. Good morning, Scott. So there are a few things that are core to how we view an opportunity. The first is the market. So we do want to be focused on a market that has a favorable growth profile.

Steve Metzger: Yeah. Good morning, Scott. There are a few things that are core to how we, how we view an opportunity. The first is the market. We do wanna be focused on a market that has a favorable growth profile, also looking at the growth of certain age ranges that are significant with our consumers. The second is the opportunity to grow the business. For example, and we've seen a lot of this, there may be great businesses with great owners, but the ability to grow that business may be limited. That would be one that we pass on. If we see an opportunity with a cemetery or with the sales team or with pre-need, to grow that with the support and the investment from Carriage, that becomes very attractive to us.

Speaker #4: Also looking at the growth of certain age ranges. That are significant with our consumers. The second is the opportunity to grow the business. So for example, and we've seen a lot of this, there may be great businesses with great owners, but the ability to grow that business may be limited.

Speaker #4: So that would be one that we pass on. But if we see an opportunity with a cemetery or with a sales team or with pre-need, to grow that with the support and the investment from Carriage, then that becomes very attractive to us.

Speaker #4: And then the final piece is the valuation. So, as we've talked about, I would say of the consolidators in this business, we probably do, on average, the fewest number of total transactions, but we see that come back on revenue and margin and growth of those businesses.

Steve Metzger: The final piece is the valuation. As we've talked about, I would say, of the consolidators in this business, we probably do, on average, the fewest number of total transactions, but we see that come back on revenue and margin and growth of those businesses. The reason for that is we see the same number of opportunities. We just pass on a lot of them because of either valuation and price or opportunity. We'll continue to be selective, and that's why, you know, it's tough for us to predict quarter by quarter, you know, which businesses will come in. Long term, we know there's gonna be a pretty significant growth for Carriage on the M&A front.

Speaker #4: And the reason for that is we see the same number of opportunities. We just pass on a lot of them because of either valuation and price or opportunity.

Speaker #4: So we'll continue to be selective. And that's why it's tough for us to predict quarter by quarter which businesses will come in. But long-term, we know there's going to be a pretty significant growth for Carriage on the M&A front.

Speaker #6: Great. Thanks very much.

Scott Schneeberger: Great. Thanks very much.

Operator: There are no further questions in the queue at this time. I will now turn the call back over to Carlos Quezada for closing remarks.

Speaker #1: There are no further questions in the queue at this time. I will now turn the call back over to Carlos Quezada for closing remarks.

Speaker #6: Thank you, everybody, for attending our call today. Our focus remains clear: discipline execution, purposeful growth, and consistent improvement. We appreciate your confident support. Have a great day and we'll talk during our second quarter report.

Carlos Quezada: Thank you, everybody, for attending our call today. Our focus remains clear: disciplined execution, purposeful growth, and consistent improvement. We appreciate your confidence and support. Have a great day, and we'll talk during our Q2 report.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.