Carriage Services, Inc.

Good morning, everyone, and thank you for joining us to discuss our third quarter results.

In addition to myself, on the call this morning from management are Carlos Quesada, Chief Executive Officer and Vice Chairman of the Board of Directors, and John Enright, 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 include 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, 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. 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, and now I'd like to turn the call over to Carlos.

Thank you, Steve. Good morning, everyone, and thank you for joining our third quarter earnings call. I am excited to share our performance and the progress we are making towards our 2030 vision. This quarter reflects continued momentum and demonstrates the effectiveness of our strategic objectives, grounded in disciplined capital allocation relentless improvement, and purposeful growth, which continue to deliver meaningful and sustainable results. During this call, I will highlight the key financial and operational drivers. Then John will take a deeper dive into our financial performance, balance sheet, recent divestiture activity, and guidance for the remainder of the year. Before we begin, I want to thank our incredible carriage team, Your passion, ownership mindset, and unwavering commitment to creating premier experiences for the families and communities we serve are the heart of this company. You continue to build a best-in-class culture rooted in trust, partnership, and service excellence. Through every premier experience, you elevate the reputation of our funeral homes and cemeteries across the country, one family at a time. Thank you. I also want to welcome the newest members of the Carriage family, Faith Chapel Funeral Homes and Crematory, Osceola Memory Gardens Cemetery Funeral Homes and Crematory, Portocelli Funeral Homes and Crematory, Fisk Funeral Homes and Crematory, Funerales Borinquen, and Cremation Care Providers of Central Florida. We are honored you chose to partner with Carriage. We will work every day to protect and elevate your legacy. Welcome to the team. Now turning to our financial results. Total operating revenue for the quarter grew to $101.3 million, an increase of 5.2% over the same period last year, primarily driven by an impressive 21.4% year-over-year increase in pre-need cemetery sales. Another strong driver was general agency commission revenue. tied to insurance-funded prearranged funeral sales, which grew to $2.6 million, up 61% from last year's third quarter. As we look at the segment, Funeral operating revenue was down 753,000, or 1.3%, primarily driven by a 2.1% reduction in funeral volume. The summer months, July and August, produced lower volumes than expected. However, we are glad to see volume return to normal in September. And based on what we have seen in October, we expect a normalized volume trend to continue in the fourth quarter. As it relates to our cemetery segment, it continues to be a key long-term value engine with operating revenue reaching $35.6 million, an increase of $4 million or 12.6% year-over-year. This performance underscores a strong runway for purposeful growth as we continue our investment in property development, technology-enabled sales capabilities, and deepening community relationships, which we believe will create enduring value for families and our shareholders. Regarding our insurance-funded parents' funeral sales strategy, we're very pleased to report that our progress is exceeding expectations, with September setting an all-time high and surpassing the $7 million mark in pre-need funeral sales. This accounted for 50.5% of the year-over-year growth in financial revenue from general agency commissions. We continue to work hand-in-hand with our sales partners, the National Guardian Life Insurance Company and PRECOA, to identify ways to leverage their technological capabilities and increase pre-need sales. With our continuous focus on execution, we believe we can sustainably grow pre-need funeral sales through 2026. Total field EBITDA for the quarter was $46.3 million, an increase of $1.4 million or 3.1%. This growth was driven in large part by renewed momentum in printing cemetery sales following permit delays earlier in the year, resulting in a strong 21.4% increase over the same period last year. We are very excited about the short-term future of our pre-need cemetery sales strategy with the launch of Sales Edge 2.0, our upgraded CRM platform, which now integrates a marketing module to generate and convert leads more effectively. And in November, we will introduce Titan, our AI-powered sales agent designed to generate leads and schedule appointments for our pre-need counselors. Cells Edge 2.0 and Titan represents a significant step forward in leveraging technology, innovation, and data analytics to accelerate cells growth. We remain confident in our cell strategy and continue to grow pre-need cemetery cells within our previously stated range of 10% to 20%. During the third quarter, adjusted consolidated EBITDA grew to 33 million Up 2.2 million or 7.3% versus last year. An adjusted consolidated EBITDA margin was 32.1% compared to 30.5% during the third quarter of last year. An expansion of 160 basis points, reflecting our strong operating leverage and positive momentum heading into the last quarter of this year. Adjusted diluted earnings per share were $0.75 up from $0.64 in the same quarter last year, an increase of 17.2%, reflecting our continued operational momentum and disciplined financial management and reinforcing our commitment to long-term shareholder value creation. In closing, we are very pleased with our third quarter results. They reflect disciplined execution and our unwavering focus on delivering premier experiences for the families we serve. These results also underscore the strength of our team, the power of our partnerships, and the meaningful progress we're making as we elevate the experience and lead with a true passion for service. Our focus remains grounded in successfully executing on our three strategic objectives. disciplined capital allocation to invest in long-term strategic value creation while maintaining a strong balance sheet, relentless improvement to elevate performance, efficiencies, and talent at every level, and purposeful growth fueled by culture, innovation, partnerships, and strategic acquisitions. We believe our greatest strength is our culture, rooted in trust, empowerment, innovation, and a sincere passion for delivering premier experiences to every family, every time. Our field leaders exemplify compassion, excellence, and ownership, redefining how families are served and advancing our mission every single day. We are continuing to build something enduring, a modern, innovative, values-driven, courage, position for sustainable long-term value creation for our families, our employees, and our shareholders. As we enter the final quarter of the year, we do so with momentum, confidence, and a clear vision for the future. Thank you, and I now turn the call over to John.