StoneMor Inc.

Greetings and welcome to the Stonewall 2Q earnings release. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Tuesday, August 10, 2021. I would now like to turn the conference over to Keith Trost. VP Financial Planning and Analysis. Please go ahead.

Thank you. Good afternoon, everyone, and thank you again for joining us on the Stonemore, Inc. conference call to discuss our 2021 second quarter financial results. You should all have a copy of the press release we issued earlier today. If anyone does not have a copy, you can find the full release on our website at www.stonemore.com. Additionally, a copy of the presentation can also be found on our website. With us on the call this afternoon are Joe Redling, President and Chief Executive Officer, and Jeffrey D. Giovanni, Senior Vice President and Chief Financial Officer. Before we begin, as usual, I'd like to remind everyone that this conference call will include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address operating performance, events, or developments that we expect or anticipate to occur in the future are forward-looking statements. These forward-looking statements are based on management's good faith beliefs and assumptions. Our management believes that these forward-looking statements are reasonable. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of today's date. We do not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise, except as required by law. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results, events, and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include but are not limited to those described in the reports which we file with the SEC. During the call, we will reference certain non-GAAP financial measures, such as adjusted EBITDA and unlevered free cash flow. A reconciliation of these measurements to the most directly comparable measures calculated in accordance with GAAP is provided in the press release and presentation. With that, I'll now turn the call over to Joe Rebling, who will take it from here.

Thank you, Keith. And thank you, everyone, for joining us this afternoon for our 2021 second quarter earnings call. I'm pleased to report another strong financial performance for the second quarter of 2021. We've continued to build upon the momentum from the second half of last year and the first quarter of 2021. Q2 results were driven by the strength in sales as we continue to achieve new highs in overall sales production. In fact, each of the three months in the second quarter represented new same store highs for Stonemore for those respective months, accumulating with the best second quarter sales performance in company history. Specifically, during the second quarter, we experienced pre-need cemetery sales production growth of 26% versus the second quarter of 2020. As you may recall, early April of 2020 was negatively impacted by the early stages of lockdown associated with the COVID-19 pandemic, which has driven some portion of the year-over-year growth. But we also saw similar growth levels in the months of May and June where the 2020 comp was not as negatively impacted by COVID-19. In fact, during May and June of 2020, we began to deliver year-over-year growth in our sales production versus 2019. To put this into perspective, our pre-need cemetery sales production in Q2 2021 also increased the same 26% versus the second quarter of 2019. From an at-need perspective, nationally, we've seen the impact of COVID-related deaths subside during the second quarter. But we've continued to maintain consistent at-need cemetery sales production levels, with only a 5% sequential decline versus the first quarter of 2021, despite national death rates declining. In fact, our at-need cemetery sales production for the second quarter of 2021 increased 11% versus the second quarter of 2020, and 32% versus the second quarter of 2019, which again reinforces our improving market share across our portfolio. Combining both pre-need and at-need sales production, total cemetery sales production increased 21% versus the second quarter of 2020 and 28% versus the second quarter of 2019. For the first six months of 2021, we've seen impressive year-to-date increases in cemetery sales production of 32% versus 2020 and 39% versus 2020. 2019, which is a pre-COVID period. This remarkable growth in sales production is a testament to our operations and sales teams. These results are on a same-store basis and excludes the impact on any acquired or divested properties. We've been able to accomplish this through a complete change in our culture, from our hiring process to our training process to our compensation methodologies. Thanks to the culture that we've established, we do believe that these sales production metrics are sustainable, even as the COVID tailwinds continue to subside. This growth in cemetery sales production has certainly contributed to growth in gap revenue recognition. We recognized $83 million in revenue during the second quarter of 2021, which represents a 24.6% growth versus the second quarter of 2020. For the six months ended June 30th, 2021, we recognize 161,300,000 in revenue, which represents a 22.5% growth versus the prior year. I want to reiterate that this is on a continuing operations basis. That is, it excludes any impact from divested locations And this growth rate was driven 100% through same store growth. It excludes the results from divested locations and was not impacted by acquisition, which has typically been a key driver of growth historically for Stone Moor and the industry at large. From an adjusted EBITDA perspective, we again had another strong quarter. delivering $32.1 million in adjusted EBITDA recognized during the quarter. This represents 113% growth over the second quarter of 2020. For the six-month end of June 30, 2021, we recognized adjusted EBITDA of $60,100,000. That's a $37.9 million improvement, or 171%. versus the first six months ended June 30th, 2020. We utilize the adjusted EBITDA metric as a measurement tool for our current performance and the current direction of the company as the adjustments take into consideration our current sales production levels. Jeff will get into more detail on our financial results shortly, but this improvement has been driven by the successful implementation of our turnaround strategy, which included the implementation of $50 million in annual cost savings and the improved sales performance that we've already discussed. Back in March of this year, we issued guidance on two metrics that we feel accurately reflect the ongoing performance of the company. The first was unlevered free cash flow. This key metric demonstrates the ability of Stonemore to generate cash through our operations. It eliminates the timing impacts of revenue recognition standards and focuses on how we convert contracts into cash. We provided unlevered free cash flow guidance of $40 million for the full year in 2021. We generated $14.7 million of unlevered free cash flow during the second quarter, which represents a sequential increase of 28% versus the first quarter of 2021. For the first six months of 2021, we generated $26.2 million in unlevered free cash flow, clearly trending well ahead of the full-year guidance and more than doubling prior year's results of just over $11 million. The second item that we provided guidance on was growth in trust assets. This metric is important as it reflects two things. First, the strength of our sales production activity as that creates new deposits into our trust accounts. And second, our ability to generate meaningful returns on our trust investments. Our full year guidance for 2021 was $50 million in trust growth. As of June 30th, 2021, we have already generated trust growth of $57.5 million during 2021. 115% of our guidance for the full year. That growth is net of cash distributions, including distributions related to divestiture activity, which was contemplated in our initial issued guidance. Our ability to outperform the full year guidance has been driven largely by outperformance on both sales production and positive investment returns. We are currently sitting with more than $90 million in cash on our books. This cash was generated not only through cash flow from operations, but also from the refinancing that was completed early in the second quarter, which we discussed at length during the first quarter earnings call. We previously announced the small acquisition that we are looking to close during 2021. And we continue to take the strategic approach to our capital allocation We're diligently managing both our capital and operating expenditures while driving operating cash flows. We continue to opportunistically pursue additional accretive and synergistic acquisitions utilizing our cash on hand. As we previously discussed, we have the ability under the terms of our indenture to secure up to an additional $40 million in a super senior credit facility should we need additional capital to complete a strategic acquisition. We are also continuing to improve our existing portfolio and targeted capital, both in terms of needed repairs and maintenance, but also with new growth inventory, particularly cremation-related inventory. We expect that these investments will continue to contribute to the organic growth of our sales production levels and expanded margins. While the successful execution of our turnaround strategy was an important step It was only the first phase of the StoneMoor transformation. We're now on the right trajectory and have the tools and team in place to execute on the next phase of our transformation, which is already in full force, a continued focus on growth. Our strong liquidity position and the ongoing profitability and cash flow improvements of our business will enable us to drive both organic and inorganic growth as we focus on the continued optimization of our core operations and accretive acquisitions. We have executed the initial turnaround plan and delivered, and we expect to execute on our growth plan with the same level of focus and commitment. With that, I'll turn the call over to Jeff, who will walk you through a more detailed review of our financial performance during the second quarter.