Carriage Services : Investor Presentation

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Investor Presentation

A L L R I G H T S R E S E R V E D

Notice to Investors

Certain statements made herein or else whereby, or on behalf of, the Company that are not historical facts are intended to be forward‐looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on assumptions that the Company believes are reasonable; however, many important factors, as discussed under "Risk Factors" and "Forward‐Looking Statements" in the Company's Annual Report on Form 10‐K for the year ended December 31, 2023, could cause the Company's results in the future to differ materially from the forward‐looking statements made herein and in any other documents or oral presentations made by, or on behalf of, the Company.

This presentation constitutes the views of the Company at the time they were generated. Any past performance information presented herein is not a guarantee or indication of future results and should not be relied upon for such reason. Forward-looking statements contained herein include any statements regarding any expectations and projections of earnings, revenue, cash flow, investment returns, capital allocation, debt levels, equity performance, death rates, market share growth, cost inflation, overhead, preneed sales or other financial items. Forward-looking statements contained herein also include any statements of the plans, strategies, objectives, and expectations of management for future operations or financing activities, including, but not limited to, capital allocation, organizational performance, execution of our strategic initiatives and growth plan, planned divestitures, anticipated integration, performance and other benefits of recently completed acquisitions, technology improvements, and cost management and debt reductions. We can provide no assurances that these planned activities and objectives will be successfully implemented nor can we provide any assurances that we will generate the revenue growth, free cash flow, market share growth and operational performance referenced herein. We can provide no assurances that our strategic initiatives and growth plans will be successfully executed nor can we provide any assurances that we will meet the timing, objectives and expectations related to our capital allocation framework, including our forecasted rates of return, leverage ratio targets, planned uses of free cash flow and future capital allocation, including potential strategic acquisitions, divestiture transactions, internal growth projects or debt reduction plans. We can provide no assurance that we will meet the expectations related to our ability to generate preneed sales, including implementing our cemetery portfolio sales strategy, product development and optimization plans. These statements are not facts and are made based upon such expectations, assumptions and views as they exist as of the date of this presentation. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, contingencies and changes in circumstances that are difficult to predict, many of which are beyond the Company's control. The Company's actual results may differ materially from those contemplated by the forward-looking statements. There is no assurance that such views are correct or will prove, with the passage of time, to be correct. Caution should be taken with respect to such statements and recipients should not place undue reliance on any such statements. The Company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward‐looking statements after the date they are made, whether as a result of new information, future events or otherwise. In this presentation, the Company relies on and refers to certain information and statistics from third-party sources which they believe to be reliable. The Company has not independently verified the accuracy or completeness of any such third-party information.

This presentation uses Non-GAAP financial measures top resent the financial performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP. We believe the Non-GAAP results are useful to investors because such results help investors compare our results to previous periods and provide insights in to underlying trends in our business. In addition, the Company's presentation of these measures may not be comparable to similarly titled measures of other companies. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within the most current press release and on our Investor Relations page of the website.

A copy of the Company's Annual Report on Form 10‐K for the year ended December 31, 2023, and other public filings and news releases, are available at www.carriageservices.com

A L L R I G H T S R E S E R V E D

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Key Investment Highlights

Innovative, Profitable Consolidation Platform

Robust, Consistent Cash Flow Generation

Near-term, Organic Growth Driven by Strategic Initiatives

Favorable Industry and Demographic Tailwinds

• Proven management team with diverse experience and a focus on continuous improvement and innovation
• Operational structure efficiently allocates resources to drive higher margins and greater return on invested capital
• Maximize shareholder value creation through efficiencies gained via increased size and scale
• Business model generates strong, sustainable EBITDA margins and free cash flow
• Disciplined capital allocation strategy to accelerate deleveraging and enhance shareholder value
• Innovative "Standards Operating Model" positions Carriage for organic growth
• Sustained momentum of cemetery sales focus drives strong revenue and EBITDA growth
• Significant growth in pre-arranged funeral sales through recent strategic national partnership
• Continued integration of recent acquisitions, maximizing potential of these premier properties
• Well-positionedto benefit from rising population of "Baby Boomers" and adults aged 55+
• Stable demographic trends translate into predictable demand
• Highly fragmented industry facilitates high-quality inorganic growth opportunities

A L L R I G H T S R E S E R V E D

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Carriage Services At A Glance

Company Overview

2023 Financial Highlights

NYSE listed

Overview &

History

Geographic

reach

• Ticker: CSV (NYSE)
• Market cap: ~$386 mm(1)
• One of three publicly traded funeral and cemetery services and merchandise companies in the United States
• Based in Houston, TX
• 2,602 employees (1,249 full-time)(2)
• Founded in 1991
• Operations in United States only
• 165 funeral homes in 26 states(1)
• 31 cemeteries in 11 states(1)

$ in mm, unless per share amounts

Total Revenue

Total Field EBITDA

% Margin

Overhead(3)

As % of Total revenue

Adjusted Consolidated EBITDA

% Margin

Adjusted Diluted EPS

Adjusted Free Cash Flow

FY 2023

$382.5

$161.1

42.1%

$50.1

13.1%

$113.2

29.6%

$2.19

$55.1

1. As of market close on April 8, 2024.
2. As of December 31, 2023.
3. Defined as regional and unallocated funeral and cemetery costs and general, administrative and other costs, excluding home office depreciation and non-cash stock compensation.

A L L R I G H T S R E S E R V E D

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Diverse National Footprint

Established footprint in the most populous states with opportunities to enter new high- growth markets and capitalize on acquisition opportunities that can easily be integrated into existing operations

Favorable age demographics within states across the Company's footprint

(1) As of April 8, 2024.

A L L R I G H T S R E S E R V E D

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Proven Management Team

Carlos R. Quezada

Vice Chairman of the Board &

Chief Executive Officer

• Named CEO in June 2023
• Previously held the roles of VP of Cemetery Sales & Marketing, SVP Sales & Marketing, EVP and COO, and President
• Prior to joining Carriage, served as Managing Director for SCI for 12 years where he held leadership roles for both sales and operations
• Two decades experience in the hospitality industry holding diverse leadership positions

Steven D. Metzger

President

• Named President in June 2023 and leads Corporate Development, Legal, HR, Risk Management, and Continuous Improvement
• Previously held roles of SVP and General Counsel, EVP and Chief Administrative Officer
• Prior to joining Carriage, served as SVP, General Counsel and Secretary for a publicly- traded company in the restaurant industry and served in multiple leadership roles at SCI

Kian Granmayeh

Executive Vice President,

Chief Financial Officer & Treasurer

• Joined Carriage in March 2023 as EVP, Chief Financial Officer and Treasurer
• Previously served as EVP and Chief Financial Officer for Tellurian
• Held multiple roles in Investor Relations and Finance at APA Corp, and served as Vice President at Lazard

Purpose Statement: Create premier experiences through innovation, empowered partnership, and elevated service.

A L L R I G H T S R E S E R V E D

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Carriage Operates in Two Primary Segments

2023 Operating

		Segment Overview
	•	Burial and cremation
	•	Arrangements, transfers, sale
		of caskets and related funeral
Funeral		merchandise
• Use of funeral home facilities
		for visitation and memorial
	•	services
	Preneed funeral sales
	• Burials, sale of interment rights
		(grave sites, lawn crypts,
		mausoleum spaces and
Cemetery		niches), cemetery merchandise
	•	and services
	Preneed cemetery sales
		through advance planning

(1) Figures as reported each year.

A L L R I G H T S R E S E R V E D

5-Year Field Operating Revenue & EBITDA Margins(1)

	$227	$253	$251	$249
$200
	41%	43%
	PEAK	41%
38%			38%
	COVID
2019	2020	2021	2022	2023
		$92	$90	$102
	$69	46%
$50		42%
	PEAK	40%
	38%
34%
	COVID
2019	2020	2021	2022	2023

Revenue Mix

~71%

Funeral Homes

~29%

Cemetery

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Long-Term Growth Profile

Total Revenue & Adjusted Consolidated EBITDA Margin

							$376	$370	$383
						$329
			$258	$268	$274		34%
		$248
	$243
$226
					32%
		30%					PEAK
	29%						30%	30%
27%					28%		COVID
		27%
			26%
2014	2015	2016	2017	2018	2019	2020	2021	2022	2023

6.0% Total Revenue CAGR(1) over the last ten years

Adjusted Diluted EPS

							$3.02
								$2.61
									$2.19
						$1.86
	$1.48	$1.62
$1.34		$1.39
			$1.25
					COVID PEAK
				$1.17
2014	2015	2016	2017	2018	2019	2020	2021	2022	2023

8.4% Adjusted Diluted EPS CAGR(2) over the last ten years

A L L R I G H T S R E S E R V E D	(1)	Total Revenue CAGR 2013 base year is $214 mm.	8
(2)	Adjusted Diluted EPS 2013 base year is $0.98 per share.

Favorable Debt Maturity and Deleveraging Profile

Simple Long-Term Debt Maturity Schedule

Steady Deleveraging Profile

		4.25% Senior Notes			5.51x
			due May 2029			5.37x
						5.28x
					$400			5.13x
$250 mm Credit Facility									4.75x‐5.00x
due May 2026
Credit facility availability	$68
	as of 12/31/23(1)
Credit facility drawn	$179
	as of 12/31/23
2024	2025	2026	2027	2028	2029	1Q23A	2Q23A	3Q23A	4Q23A	4Q24E
(1) Net of outstanding letters of credit.
A L L R I G H T S R E S E R V E D							9

Our Five-Year Strategic Objectives

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2

Disciplined Capital Allocation

• Leverage ratio of 3.5x - 4.0x
• ROIC of 15-20%
• Divestiture of underperforming assets and deployment of proceeds towards premier businesses, in alignment with our long- term growth strategy

Purposeful Growth

• 5% - 8% Organic revenue CAGR
• $50 - $100 million strategic inorganic capital deployment
• 5% gain in cremation market share

Relentless Improvement

• Evolution of legacy systems with Trinity
• Elimination of manual processes
• Focus on automation of processes

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