SERVICE CORPORATION INTERNATIONAL ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS
Service International (NYSE: SCI) reported Q3 2024 financial results with revenue growth of $12.1 million compared to Q3 2023. The company achieved earnings per share of $0.81 and adjusted EPS of $0.79. Operating cash flow increased 16% to $263.8 million. Notable highlights include a 2.1% growth in comparable core funeral sales average and significant acquisition activity, investing $123 million to add 10 funeral homes and 2 cemeteries. For Q4 2024, SCI projects adjusted EPS of $1.00-$1.10, and has revised its full-year 2024 adjusted operating cash flow guidance to $940-$960 million.
Service International (NYSE: SCI) ha riportato i risultati finanziari del terzo trimestre 2024 con una crescita dei ricavi di 12,1 milioni di dollari rispetto al terzo trimestre 2023. L'azienda ha raggiunto un utile per azione di 0,81 dollari e un EPS rettificato di 0,79 dollari. Il flusso di cassa operativo è aumentato del 16%, raggiungendo 263,8 milioni di dollari. I punti salienti includono una crescita del 2,1% nel fatturato medio delle vendite di pompe funebri core comparabili e un'attività di acquisizione significativa, investendo 123 milioni di dollari per aggiungere 10 case funerarie e 2 cimiteri. Per il quarto trimestre 2024, SCI prevede un EPS rettificato di 1,00-1,10 dollari, e ha rivisto le sue stime per il flusso di cassa operativo rettificato per l'intero anno 2024 a 940-960 milioni di dollari.
Service International (NYSE: SCI) informó los resultados financieros del tercer trimestre de 2024, con un crecimiento de ingresos de 12,1 millones de dólares en comparación con el tercer trimestre de 2023. La empresa logró ganancias por acción de 0,81 dólares y un EPS ajustado de 0,79 dólares. El flujo de caja operativo aumentó un 16%, alcanzando 263,8 millones de dólares. Los aspectos destacados incluyen un crecimiento del 2,1% en el promedio de ventas funerarias fundamentales comparables y una actividad de adquisición significativa, invirtiendo 123 millones de dólares para agregar 10 casas funerarias y 2 cementerios. Para el cuarto trimestre de 2024, SCI proyecta un EPS ajustado de 1,00 a 1,10 dólares, y ha revisado su guía de flujo de caja operativo ajustado para el año completo 2024 a 940-960 millones de dólares.
서비스 인터내셔널 (NYSE: SCI)는 2024년 3분기 재무 결과를 발표했습니다. 여기에는 2023년 3분기 대비 1210만 달러의 수익 성장이 포함됩니다. 이 회사는 주당 순이익 0.81 달러 및 조정된 EPS 0.79 달러를 달성했습니다. 운영 현금 흐름은 16% 증가하여 2억 6380만 달러에 달했습니다. 주요 하이라이트로는 경쟁 가능한 핵심 장례 판매 평균이 2.1% 증가했고, 10개 장례식장과 2개 묘지를 추가하기 위해 1억 2300만 달러를 투자하는 등 중요한 인수 활동이 있습니다. 2024년 4분기 동안 SCI는 조정된 EPS가 1.00-1.10 달러가 될 것으로 예상하며, 2024년 전체에 대한 조정된 운영 현금 흐름 가이던스를 9억 4000만 달러에서 9억 6000만 달러로 수정했습니다.
Service International (NYSE: SCI) a rapporté les résultats financiers du troisième trimestre 2024, avec une croissance des revenus de 12,1 millions de dollars par rapport au troisième trimestre 2023. L'entreprise a atteint un bénéfice par action de 0,81 dollar et un EPS ajusté de 0,79 dollar. Le flux de trésorerie opérationnel a augmenté de 16% pour atteindre 263,8 millions de dollars. Les faits saillants incluent une croissance de 2,1% de la vente moyenne de services funéraires comparables et une activité d'acquisition significative, avec un investissement de 123 millions de dollars pour ajouter 10 maisons funéraires et 2 cimetières. Pour le quatrième trimestre 2024, SCI prévoit un EPS ajusté de 1,00 à 1,10 dollars et a révisé ses prévisions de flux de trésorerie opérationnel ajusté pour l'année 2024 à 940-960 millions de dollars.
Service International (NYSE: SCI) hat die finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben, mit Umsatzwachstum von 12,1 Millionen Dollar im Vergleich zum 3. Quartal 2023. Das Unternehmen erzielte Gewinne pro Aktie von 0,81 Dollar und ein bereinigtes EPS von 0,79 Dollar. Der operative Cashflow stieg um 16% auf 263,8 Millionen Dollar. Zu den bemerkenswerten Höhepunkten gehören ein Wachstum von 2,1% im durchschnittlichen vergleichbaren Kernverkauf von Bestattungen sowie bedeutende Akquisitionsaktivitäten, bei denen 123 Millionen Dollar investiert wurden, um 10 Bestattungshäuser und 2 Friedhöfe hinzuzufügen. Für das 4. Quartal 2024 prognostiziert SCI ein bereinigtes EPS von 1,00-1,10 Dollar und hat die Schätzung des bereinigten operativen Cashflows für das Gesamtjahr 2024 auf 940-960 Millionen Dollar angepasst.
- Revenue increased by $12.1 million year-over-year
- Operating cash flow grew 16% to $263.8 million
- Comparable core funeral sales average increased 2.1%
- Significant expansion through $123 million in acquisitions
- Raised midpoint of 2024 adjusted operating cash flow guidance to $950 million
- Operating income decreased from $223.0M to $212.4M
- Net income declined from $122.0M to $117.8M
- Year-to-date EPS decreased from $2.60 to $2.50
- Lowered full-year 2024 EPS guidance to $3.47-$3.57 from previous $3.50-$3.80 range
Insights
SCI's Q3 2024 results show modest growth with
Notable developments include significant acquisition activity, with
While growth appears modest, SCI's strategic expansion and cash flow improvements position it well for their targeted high-end growth of
Conference call on Thursday, October 31, 2024, at 8:00 a.m. Central Time.
Third Quarter Highlights:
- Revenue grew
over the third quarter of 2023$12.1 million - Earnings per share was
compared to$0.81 in the third quarter of 2023$0.80 - Adjusted earnings per share was
compared to$0.79 in the third quarter of 2023$0.78 - Net cash provided by operating activities grew
16% to in the current year quarter compared to$263.8 million in the prior year quarter$227.8 million - Net cash provided by operating activities excluding special items grew
18% to in the current year quarter compared to$269.0 million in the prior year quarter$227.8 million - Comparable core funeral sales average grew
2.1% in the current quarter - Acquisition spend during the quarter was
compared to$123 million in the third quarter of 2023$33 million
Tom Ryan, the Company's Chairman and CEO, commented on the third quarter performance:
"Today we reported adjusted earnings per share of
We also had a very active quarter on the acquisition front including premier locations in major metropolitan markets. We invested
In 2025, we are targeting a return to the high end of our 8
Details of our third quarter 2024 financial results and the unaudited consolidated financial statements can be found in the Appendix at the end of this press release. The table below summarizes our key financial results.
(Dollars in millions, except for per share amounts) | Three months ended September 30, | Nine months ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | |||||
Revenue | $ 1,014.0 | $ 1,001.9 | $ 3,093.4 | $ 3,044.0 | ||||
Operating income | $ 212.4 | $ 223.0 | $ 665.5 | $ 702.1 | ||||
Net income attributable to common stockholders | $ 117.8 | $ 122.0 | $ 367.3 | $ 398.9 | ||||
Diluted earnings per share | $ 0.81 | $ 0.80 | $ 2.50 | $ 2.60 | ||||
Earnings excluding special items (1) | $ 115.3 | $ 119.1 | $ 363.1 | $ 390.9 | ||||
Diluted earnings per share excluding special items (1) | $ 0.79 | $ 0.78 | $ 2.47 | $ 2.55 | ||||
Diluted weighted average shares outstanding | 146.2 | 152.3 | 147.0 | 153.6 | ||||
Net cash provided by operating activities | $ 263.8 | $ 227.8 | $ 680.8 | $ 591.5 | ||||
Net cash provided by operating activities excluding special items (1) | $ 269.0 | $ 227.8 | $ 709.0 | $ 604.8 |
(1) | Earnings excluding special items, diluted earnings per share excluding special items, and net cash provided by operating activities excluding special items are non-GAAP financial measures. These items are also referred to as "adjusted earnings per share" and "adjusted operating cash flow". A reconciliation from net income attributable to common stockholders, diluted earnings per share, and net cash provided by operating activities in accordance with generally accepted accounting principles in |
- Diluted earnings per share was
in the third quarter of 2024 compared to$0.81 in the third quarter of 2023. The current year quarter was favorably impacted by$0.80 of net gains on divestitures and impairment charges. The prior year quarter was favorably impacted primarily by$3.5 million of net gains on divestitures and impairment charges. Diluted earnings per share excluding special items was$2.5 million in the third quarter of 2024 compared to$0.79 in the third quarter of 2023. Gross profit for both funeral and cemetery were flat, while a lower share count and a lower tax rate more than offset increased corporate general and administrative expense, resulting from changes in our stock price on our long-term incentive compensation plan, and slightly higher interest expense.$0.78 - Net cash provided by operating activities grew
to$36.0 million in the third quarter of 2024 compared to$263.8 million in the third quarter of 2023. The current year was impacted by payments related to legal matters that were expensed in 2022 of$227.8 million . Net cash provided by operating activities, excluding special items, grew$5.2 million to$41.2 million in the third quarter of 2024 compared to$269.0 million in the third quarter of 2023. Favorable changes in preneed working capital, supported by stronger preneed cash receipts, more than offset an increase in cash interest payments and lower operating income.$227.8 million
OUTLOOK FOR 2024
Our current outlook for the fourth quarter of 2024 for adjusted earnings per share is
In conjunction with our expectation of continued strength in our operating cash flow and coupled with the strong fourth quarter growth anticipated in adjusted earnings per share stated above, we are raising the midpoint of our full year 2024 adjusted operating cash flow guidance from
Our full year 2024 outlook for maintenance capital expenditures remains unchanged at approximately
(Dollars in millions, except per share amounts) | Q4 2024 Outlook | 2024 Outlook | |||||
Diluted earnings per share excluding special items (1) | |||||||
Net cash provided by operating activities excluding special items and cash taxes (1) | |||||||
Cash taxes | |||||||
Net cash provided by operating activities excluding special items (1) | |||||||
Capital improvements at existing field locations | ~ | ||||||
Development of cemetery property | ~ | ||||||
Digital investments and corporate | ~ | ||||||
Total maintenance, cemetery development, and other capital expenditures (Maintenance capital expenditures) | ~ | ||||||
(1) | Diluted earnings per share excluding special items and net cash provided by operating activities excluding special items are non-GAAP financial measures. We normally reconcile these non-GAAP financial measures from diluted earnings per share and net cash provided by operating activities; however, diluted earnings per share and net cash provided by operating activities calculated in accordance with GAAP are not currently accessible on a forward-looking basis. Our outlook for 2024 excludes the following because this information is not currently available for 2024: Expenses net of insurance recoveries related to weather events and hurricanes, gains or losses associated with asset divestitures, gains or losses associated with the early extinguishment of debt, potential tax reserve adjustments and IRS payments and/or refunds, acquisition and integration costs, system implementation and transition costs, and potential costs or cash outflows associated with estimated litigation charges or legal settlements or the recognition of receivables for insurance recoveries associated with litigation, or deferred tax payments. The foregoing items could materially impact our forward-looking diluted earnings per share and/or our net cash provided by operating activities calculated in accordance with GAAP. |
CONFERENCE CALL AND WEBCAST
We will host a conference call on Thursday, October 31, 2024, at 8:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in numbers are (888) 317-6003 (US) or (412) 317-6061 (International) with the passcode of 8508625. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through November 7, 2024 and can be accessed at (877) 344-7529 (US) or (412) 317-0088 (International) with the passcode of 2356545. Additionally, a replay of the conference call will be available on our website for approximately three months.
ABOUT SERVICE CORPORATION INTERNATIONAL
Service Corporation International (NYSE: SCI), headquartered in
For additional information contact: InvestorRelations@sci-us.com | ||||
Investors: | Allie O'Connor - Assistant Vice President / Investor Relations | (713) 525-9088 | ||
Trey Bocage - Director / Investor Relations | (713) 525-3454 | |||
Media: | Jay Andrew - Assistant Vice President / Corporate Communications | (713) 525-3468 |
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate," "predict," or other similar words that convey the uncertainty of future events or outcomes. The absence of these words, however, does not mean that the statements are not forward-looking. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following:
- Our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control.
- We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.
- Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.
- We may be adversely affected by the effects of inflation.
- Our results may be adversely affected by significant weather events, natural disasters, catastrophic events, or public health crises.
- Our credit agreements contain covenants that may prevent us from engaging in certain transactions.
- If we lost the ability to use surety bonding to support our preneed activities, we may be required to make material cash payments to fund certain trust funds.
- The financial condition of third-party life insurance companies that fund our preneed contracts may impact our future revenue.
- Unfavorable publicity could affect our reputation and business.
- Our failure to attract and retain qualified sales personnel could have an adverse effect on our business and financial condition.
- We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks; therefore, we could be exposed to unexpected costs that could negatively affect our financial performance.
- Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets.
- Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.
- Our Canadian business exposes us to operational, economic, and currency risks.
- Our level of indebtedness could adversely affect our cash flows, our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.
- A failure of a key information technology system or process could disrupt and adversely affect our business.
- The funeral and cemetery industry is competitive.
- If the number of deaths in our markets declines, our cash flows and revenue may decrease. Changes in the number of deaths are not predictable from market to market or over the short term.
- If we are not able to respond effectively to changing consumer preferences, our market share, revenue, and/or profitability could decrease.
- The continuing upward trend in life expectancy and the number of cremations performed in
North America could result in lower revenue, operating profit, and cash flows. - Our funeral and cemetery businesses are high fixed-cost businesses.
- Risks associated with our supply chain could materially adversely affect our financial performance.
- Regulation and compliance could have a material adverse impact on our financial results.
- Unfavorable results of litigation could have a material adverse impact on our financial statements.
- Cemetery burial practice claims could have a material adverse impact on our financial results.
- The application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and financial results.
- Changes in taxation, or the interpretation of tax laws or regulations, as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.
For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2023 Annual Report on Form 10-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us whether as a result of new information, future events, or otherwise.
SERVICE CORPORATION INTERNATIONAL
APPENDIX: RESULTS FOR THE THIRD QUARTER OF 2024
Consolidated Statement of Operations (Unaudited) | |||||||
(Dollars in thousands, except per share amounts) | Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue | $ 1,013,958 | $ 1,001,859 | $ 3,093,356 | $ 3,043,982 | |||
Cost of revenue | (761,319) | (748,176) | (2,308,589) | (2,239,737) | |||
Gross profit | 252,639 | 253,683 | 784,767 | 804,245 | |||
Corporate general and administrative expenses | (43,732) | (33,213) | (124,055) | (112,294) | |||
Gains on divestitures and impairment charges, net | 3,515 | 2,542 | 4,755 | 10,187 | |||
Operating income | 212,422 | 223,012 | 665,467 | 702,138 | |||
Interest expense | (65,804) | (61,512) | (194,540) | (174,904) | |||
Losses on early extinguishment of debt | (25) | — | (25) | (1,114) | |||
Other income, net | 2,815 | 128 | 7,002 | 2,647 | |||
Income before income taxes | 149,408 | 161,628 | 477,904 | 528,767 | |||
Provision for income taxes | (31,547) | (39,585) | (110,549) | (129,543) | |||
Net income | 117,861 | 122,043 | 367,355 | 399,224 | |||
Net income attributable to noncontrolling interests | (34) | (72) | (61) | (302) | |||
Net income attributable to common stockholders | $ 117,827 | $ 121,971 | $ 367,294 | $ 398,922 | |||
Basic earnings per share: | |||||||
Net income attributable to common stockholders | $ 0.81 | $ 0.81 | $ 2.53 | $ 2.63 | |||
Basic weighted average number of shares | 144,706 | 150,630 | 145,421 | 151,654 | |||
Diluted earnings per share: | |||||||
Net income attributable to common stockholders | $ 0.81 | $ 0.80 | $ 2.50 | $ 2.60 | |||
Diluted weighted average number of shares | 146,223 | 152,289 | 146,978 | 153,554 |
Consolidated Balance Sheet (Unaudited) | |||
(Dollars in thousands, except share amounts) | |||
September 30, 2024 | December 31, 2023 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 185,420 | $ 221,557 | |
Receivables, net | 80,955 | 97,939 | |
Inventories | 34,571 | 33,597 | |
Income tax receivable | 52,487 | 122,183 | |
Other | 35,661 | 23,010 | |
Total current assets | 389,094 | 498,286 | |
Preneed receivables, net and trust investments | 6,766,755 | 6,191,912 | |
Cemetery property | 2,113,801 | 2,020,846 | |
Property and equipment, net | 2,564,241 | 2,480,099 | |
Goodwill | 2,084,790 | 1,977,186 | |
Deferred charges and other assets, net | 1,324,768 | 1,247,830 | |
Cemetery perpetual care trust investments | 2,162,902 | 1,939,241 | |
Total assets | $ 17,406,351 | $ 16,355,400 | |
LIABILITIES & EQUITY | |||
Current liabilities: | |||
Accounts payable and accrued liabilities | $ 658,837 | $ 685,759 | |
Current maturities of long-term debt | 84,349 | 63,341 | |
Total current liabilities | 743,186 | 749,100 | |
Long-term debt | 4,743,679 | 4,649,155 | |
Deferred revenue, net | 1,750,755 | 1,703,509 | |
Deferred tax liability | 655,486 | 638,106 | |
Other liabilities | 506,388 | 464,935 | |
Deferred receipts held in trust | 5,225,878 | 4,670,884 | |
Care trusts' corpus | 2,153,178 | 1,938,238 | |
Equity: | |||
Common stock, | 144,979 | 146,323 | |
Capital in excess of par value | 972,511 | 937,596 | |
Retained earnings | 492,294 | 432,454 | |
Accumulated other comprehensive income | 17,391 | 24,891 | |
Total common stockholders' equity | 1,627,175 | 1,541,264 | |
Noncontrolling interests | 626 | 209 | |
Total equity | 1,627,801 | 1,541,473 | |
Total liabilities and equity | $ 17,406,351 | $ 16,355,400 |
Consolidated Statement of Cash Flows (Unaudited) | |||
(Dollars in thousands) | Nine months ended September 30, | ||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net income | $ 367,355 | $ 399,224 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss on early extinguishment of debt | 25 | 1,114 | |
Depreciation and amortization | 153,932 | 141,228 | |
Amortization of intangibles | 12,759 | 14,158 | |
Amortization of cemetery property | 70,431 | 71,892 | |
Amortization of loan costs | 5,365 | 5,133 | |
Provision for expected credit losses | 9,693 | 6,997 | |
Provision for deferred income taxes | 15,243 | 166,786 | |
Gains on divestitures and impairment charges, net | (4,755) | (10,187) | |
Share-based compensation | 12,042 | 11,786 | |
Change in assets and liabilities, net of effects from acquisitions and divestitures: | |||
Decrease in receivables | 11,366 | 11,781 | |
Decrease (increase) in other assets | 12,464 | (161,687) | |
Increase (decrease) in payables and other liabilities | 20,768 | (21,961) | |
Effect of preneed sales production and maturities: | |||
Increase in preneed receivables, net and trust investments | (139,876) | (162,087) | |
Increase in deferred revenue, net | 83,331 | 105,923 | |
Increase in deferred receipts held in trust | 50,652 | 11,358 | |
Net cash provided by operating activities | 680,795 | 591,458 | |
Cash flows from investing activities: | |||
Capital expenditures | (276,837) | (267,752) | |
Business acquisitions, net of cash acquired | (161,865) | (72,535) | |
Real estate acquisitions | (53,329) | (41,084) | |
Proceeds from divestitures and sales of property and equipment | 21,632 | 22,713 | |
Payments for Company-owned life insurance policies | (3,009) | (8,050) | |
Proceeds from Company-owned life insurance policies and other | 2,673 | 10,119 | |
Other investing activities | (13,864) | — | |
Net cash used in investing activities | (484,599) | (356,589) | |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 1,336,137 | 737,433 | |
Debt issuance costs | (15,246) | (7,471) | |
Scheduled payments of debt | (18,421) | (16,402) | |
Early payments and extinguishment of debt | (1,210,024) | (490,973) | |
Principal payments on finance leases | (27,524) | (25,678) | |
Proceeds from exercise of stock options | 42,898 | 16,106 | |
Purchase of Company common stock | (197,511) | (340,279) | |
Payments of dividends | (130,811) | (125,543) | |
Bank overdrafts and other | (10,253) | (9,362) | |
Net cash used in financing activities | (230,755) | (262,169) | |
Effect of foreign currency | (1,566) | (298) | |
Net decrease in cash, cash equivalents, and restricted cash | (36,125) | (27,598) | |
Cash, cash equivalents, and restricted cash at beginning of period | 224,761 | 204,524 | |
Cash, cash equivalents, and restricted cash at end of period | $ 188,636 | $ 176,926 |
Consolidated Segment Results | |||||||
(See definitions of revenue line items later in this appendix.) | |||||||
(Dollars in millions, except funeral services performed and average revenue per service) | Three months ended September 30, | Nine months ended September 30, | |||||
2024 | 2023 | 2024 | 2023 | ||||
Consolidated funeral: | |||||||
Atneed revenue | $ 289.1 | $ 283.0 | $ 887.8 | $ 884.8 | |||
Matured preneed revenue | 173.8 | 172.3 | 542.5 | 533.7 | |||
Core revenue | 462.9 | 455.3 | 1,430.3 | 1,418.5 | |||
Non-funeral home revenue | 23.2 | 21.9 | 69.8 | 63.7 | |||
Non-funeral home preneed sales revenue | 26.9 | 32.0 | 85.1 | 109.1 | |||
Core general agency and other revenue | 53.0 | 45.6 | 151.3 | 138.6 | |||
Total revenue | $ 566.0 | $ 554.8 | $ 1,736.5 | $ 1,729.9 | |||
Gross profit | $ 107.9 | $ 109.7 | $ 340.2 | $ 374.8 | |||
Gross profit percentage | 19.1 % | 19.8 % | 19.6 % | 21.7 % | |||
Funeral services performed | 85,743 | 85,139 | 266,140 | 268,414 | |||
Average revenue per service | $ 5,669 | $ 5,605 | $ 5,637 | $ 5,522 | |||
(Dollars in millions) | Three months ended September 30, | Nine months ended September 30, | |||||
2024 | 2023 | 2024 | 2023 | ||||
Consolidated cemetery: | |||||||
Atneed property revenue | $ 34.7 | $ 35.5 | $ 105.0 | $ 105.9 | |||
Atneed merchandise and service revenue | 72.3 | 74.7 | 219.4 | 222.5 | |||
Total atneed revenue | 107.0 | 110.2 | 324.4 | 328.4 | |||
Recognized preneed property revenue | 203.4 | 214.6 | 628.2 | 626.0 | |||
Recognized preneed merchandise and service revenue | 103.6 | 93.1 | 301.8 | 269.1 | |||
Total recognized preneed revenue | 307.0 | 307.7 | 930.0 | 895.1 | |||
Core revenue | 414.0 | 417.9 | 1,254.4 | 1,223.5 | |||
Other cemetery revenue | 34.0 | 29.2 | 102.5 | 90.6 | |||
Total revenue | $ 448.0 | $ 447.1 | $ 1,356.9 | $ 1,314.1 | |||
Gross profit | $ 144.8 | $ 143.9 | $ 444.6 | $ 429.5 | |||
Gross profit percentage | 32.3 % | 32.2 % | 32.8 % | 32.7 % |
Comparable Funeral Results
The table below details comparable funeral results of operations ("same store") for the three months ended September 30, 2024 and 2023. We consider comparable funeral operations to be those businesses owned for the entire period beginning January 1, 2023 and ending September 30, 2024.
(Dollars in millions, except average revenue per service and average revenue per contract sold) | Three months ended September 30, | ||||||
2024 | 2023 | Var | % | ||||
Comparable funeral revenue: | |||||||
Atneed revenue (1) | $ 283.3 | $ 280.2 | $ 3.1 | 1.1 % | |||
Matured preneed revenue (2) | 172.1 | 170.8 | 1.3 | 0.8 % | |||
Core revenue (3) | 455.4 | 451.0 | 4.4 | 1.0 % | |||
Non-funeral home revenue (4) | 22.3 | 21.8 | 0.5 | 2.3 % | |||
Non-funeral home preneed sales revenue (5) | 26.5 | 32.0 | (5.5) | (17.2) % | |||
Core general agency and other revenue (6) | 52.7 | 45.1 | 7.6 | 16.9 % | |||
Total comparable revenue | $ 556.9 | $ 549.9 | $ 7.0 | 1.3 % | |||
Comparable gross profit | $ 107.4 | $ 108.9 | $ (1.5) | (1.4) % | |||
Comparable gross profit percentage | 19.3 % | 19.8 % | (0.5) % | ||||
Comparable funeral services performed: | |||||||
Atneed | 44,978 | 45,761 | (783) | (1.7) % | |||
Matured preneed | 25,163 | 25,189 | (26) | (0.1) % | |||
Total core | 70,141 | 70,950 | (809) | (1.1) % | |||
Non-funeral home | 13,663 | 13,520 | 143 | 1.1 % | |||
Total comparable funeral services performed | 83,804 | 84,470 | (666) | (0.8) % | |||
Comparable core cremation rate | 56.8 % | 56.5 % | 0.3 % | ||||
Total comparable cremation rate (7) | 63.7 % | 63.3 % | 0.4 % | ||||
Comparable funeral average revenue per service: | |||||||
Atneed | $ 6,299 | $ 6,123 | $ 176 | 2.9 % | |||
Matured preneed | 6,839 | 6,781 | 58 | 0.9 % | |||
Total core | 6,493 | 6,357 | 136 | 2.1 % | |||
Non-funeral home | 1,632 | 1,612 | 20 | 1.2 % | |||
Total comparable average revenue per service | $ 5,700 | $ 5,597 | $ 103 | 1.8 % | |||
Comparable funeral preneed sales production: | |||||||
Total preneed sales | $ 292.3 | $ 314.5 | $ (22.2) | (7.1) % | |||
Core contracts sold | 34,573 | 36,862 | (2,289) | (6.2) % | |||
Non-funeral home contracts sold | 22,991 | 25,294 | (2,303) | (9.1) % | |||
Core average revenue per contract sold | $ 6,435 | $ 6,417 | $ 18 | 0.3 % | |||
Non-funeral home average revenue per contract sold | $ 3,037 | $ 3,081 | $ (44) | (1.4) % |
(1) | Atneed revenue represents merchandise and services sold and delivered or performed once death has occurred. |
(2) | Matured preneed revenue represents merchandise and services sold on a preneed contract through our core funeral homes, which have been delivered or performed as well as the related merchandise and service trust fund income and other insurance benefits. |
(3) | Core revenue represents the sum of merchandise and services sold on an atneed contract or preneed contract, which were delivered or performed once death has occurred through our core funeral homes. |
(4) | Non-funeral home revenue represents services sold on a preneed or atneed contract through one of our non-funeral home sales channels (e.g. SCI Direct) and performed once death has occurred. |
(5) | Non-funeral home preneed sales revenue represents travel protection, net and merchandise sold on a preneed contract that is delivered before death has occurred and general agency revenue from our non-funeral home sales channel. |
(6) | Core general agency and other revenue primarily comprises core general agency revenue, which is commissions we receive from third-party insurance companies for life insurance policies sold to preneed customers for the purpose of funding preneed arrangements and core travel protection preneed sales, net. |
(7) | Total comparable cremation rate includes the impact of cremation services through our non-funeral sales channel (e.g. SCI Direct). |
- Total comparable funeral revenue increased by
, or$7.0 million 1.3% , as an increase of in core funeral revenue and a$4.4 million increase in core general agency and other revenue was offset by a$7.6 million decrease in non-funeral home preneed sales revenue.$5.5 million - Core funeral revenue increased by
, or$4.4 million 1.0% , primarily due to a favorable2.1% increase in core average revenue per service partially offset by a1.1% decrease in core funeral services performed. The core cremation rate increased 30 basis points to56.8% . - Non-funeral home preneed sales revenue decreased by
, or$5.5 million 17.2% , primarily due to a decline of non-funeral home preneed sales production decrease of , or$8.1 million 10.4% , impacted by our transition from trust to insurance-funded contracts. - Core general agency and other revenue grew
, primarily due to growth in general agency revenue from higher commission rates, primarily as a result of our new preneed insurance marketing agreement.$7.6 million - Comparable funeral gross profit decreased by
to$1.5 million and the gross profit percentage decreased 50 basis points from$107.4 million 19.8% to19.3% . The stability in gross profit, in light of modest revenue growth, reflects our continued focus on managing our fixed cost structure. - Comparable preneed funeral sales production decreased by
, or$22.2 million 7.1% , in the third quarter of 2024 compared to 2023. Core preneed sales production decreased by , or$14.1 million 6.0% , primarily due to the transition to our new preneed insurance provider. Non-funeral home preneed sales production decreased , or$8.1 million 10.4% , primarily due to our transition from trust to insurance-funded contracts.
Comparable Cemetery Results
The table below details comparable cemetery results of operations ("same store") for the three months ended September 30, 2024 and 2023. We consider comparable cemetery operations to be those businesses owned for the entire period beginning January 1, 2023 and ending September 30, 2024.
(Dollars in millions) | Three months ended September 30, | ||||||
2024 | 2023 | Var | % | ||||
Comparable cemetery revenue: | |||||||
Atneed property revenue | $ 34.5 | $ 35.5 | $ (1.0) | (2.8) % | |||
Atneed merchandise and service revenue | 72.1 | 74.6 | (2.5) | (3.4) % | |||
Total atneed revenue (1) | 106.6 | 110.1 | (3.5) | (3.2) % | |||
Recognized preneed property revenue | 202.8 | 214.4 | (11.6) | (5.4) % | |||
Recognized preneed merchandise and service revenue | 103.3 | 93.0 | 10.3 | 11.1 % | |||
Total recognized preneed revenue (2) | 306.1 | 307.4 | (1.3) | (0.4) % | |||
Core revenue (3) | 412.7 | 417.5 | (4.8) | (1.1) % | |||
Other revenue (4) | 33.9 | 29.1 | 4.8 | 16.5 % | |||
Total comparable revenue | $ 446.6 | $ 446.6 | $ — | — % | |||
Comparable gross profit | $ 144.9 | $ 144.3 | $ 0.6 | 0.4 % | |||
Comparable gross profit percentage | 32.4 % | 32.3 % | 0.1 % | ||||
Comparable cemetery preneed and atneed sales production: | |||||||
Property | $ 232.2 | $ 244.3 | $ (12.1) | (5.0) % | |||
Merchandise and services | 186.8 | 185.4 | 1.4 | 0.8 % | |||
Discounts and other | — | (4.8) | 4.8 | 100.0 % | |||
Preneed and atneed sales production | $ 419.0 | $ 424.9 | $ (5.9) | (1.4) % | |||
Preneed sales production | $ 314.1 | $ 322.0 | $ (7.9) | (2.5) % | |||
Recognition rate (5) | 98.5 % | 98.3 % |
(1) | Atneed revenue represents property, merchandise, and services sold and delivered or performed once death has occurred. |
(2) | Recognized preneed revenue represents property, merchandise, and services sold on a preneed contract, which were delivered or performed as well as the related merchandise and service trust fund income. |
(3) | Core revenue represents the sum of property, merchandise, and services that have been delivered or performed as well as the related merchandise and service trust fund income. |
(4) | Other revenue is primarily related to endowment care trust fund income, royalty income, and interest and finance charges earned from customer receivables on preneed installment contracts. |
(5) | Represents the ratio of current period core revenue stated as a percentage of current period preneed and atneed sales production. |
- Total comparable cemetery revenue in the third quarter of 2024 was flat to prior year at
as a decrease in core revenue of$446.6 million was offset by an increase in other revenue of$4.8 million .$4.8 million - Core revenue was lower by
primarily as a result of a$4.8 million decline in atneed revenue combined with a$3.5 million decrease in total recognized preneed revenue. Growth in recognized preneed merchandise and service revenue of$1.3 million from higher quality sales averages maturing out of the backlog was offset by a decline of$10.3 million in recognized preneed property revenue.$11.6 million - Other revenue was higher by
, or$4.8 million 16.5% , compared to the prior year quarter primarily from an increase in endowment care trust fund income related to the expansion of our total return investment strategy in certain states. - Comparable cemetery gross profit increased slightly by
to$0.6 million , and the gross profit percentage increased from$144.9 million 32.3% to32.4% . This growth in gross profit on relatively flat revenue reflects our continued focus on managing our fixed cost structure. - Comparable preneed cemetery sales production decreased
, or$7.9 million 2.5% , primarily due to a decline in large sales, while our core production was relatively flat.
Other Financial Results
- Corporate general and administrative expenses were
in the third quarter of 2024 compared to the third quarter of 2023 of$43.7 million . The current year third quarter was pressured by long-term incentive compensation plan expenses that were impacted by the growth in our stock price. Conversely, during the prior year third quarter we saw a decline in our stock price benefiting our long-term incentive compensation plan expenses.$33.2 million - Interest expense increased
to$4.3 million in the third quarter of 2024 primarily due to higher average balances quarter over quarter on our floating rate debt.$65.8 million - The GAAP effective income tax rate for the third quarter of 2024 was
21.1% , down from24.5% in the prior year quarter. Our adjusted effective tax rate was20.9% in the third quarter of 2024 compared to25.1% in the prior year quarter. The lower effective tax rate in the current period was primarily due to more excess tax benefits recognized on the settlement of employee share-based awards.
Cash Flow and Capital Spending
(Dollars in millions) | Three months ended September 30, | Nine months ended September 30, | |||||
2024 | 2023 | 2024 | 2023 | ||||
Net cash provided by operating activities | $ 263.8 | $ 227.8 | $ 680.8 | $ 591.5 | |||
Payments for certain legal matters | 5.2 | — | 28.2 | 13.3 | |||
Net cash provided by operating activities excluding special items | $ 269.0 | $ 227.8 | $ 709.0 | $ 604.8 | |||
Cash taxes included in net cash provided by operating activities | $ 4.0 | $ 3.8 | $ 15.8 | $ 79.7 |
Net cash provided by operating activities excluding special items grew
(Dollars in millions) | Three months ended September 30, | Nine months ended September 30, | |||||
2024 | 2023 | 2024 | 2023 | ||||
Capital improvements at existing field locations | $ 37.0 | $ 28.1 | $ 91.3 | $ 82.7 | |||
Development of cemetery property | 43.8 | 40.8 | 122.4 | 111.8 | |||
Digital investments and corporate | 7.6 | 12.9 | 32.0 | 47.5 | |||
Total maintenance, cemetery development, and other capital expenditures (Maintenance capital expenditures) | $ 88.4 | $ 81.8 | $ 245.7 | $ 242.0 | |||
Growth capital expenditures/construction of new funeral service locations | 12.6 | 8.9 | 31.1 | 25.8 | |||
Total capital expenditures | $ 101.0 | $ 90.7 | $ 276.8 | $ 267.8 |
Total capital expenditures increased in the current quarter by
Trust Fund Returns
Total trust fund returns include realized and unrealized gains and losses and dividends and are shown gross without netting of certain fees. A summary of our consolidated trust fund returns as of September 30, 2024 is set forth below:
Three Months | Nine Months | ||
Preneed funeral | 5.8 % | 12.7 % | |
Preneed cemetery | 6.1 % | 13.2 % | |
Cemetery perpetual care | 6.1 % | 12.4 % | |
Combined trust funds | 6.0 % | 12.8 % |
Non-GAAP Financial Measures
Earnings excluding special items and diluted earnings per share excluding special items shown above are non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and years, and better reflect the performance of our core operations, as they are not influenced by certain income or expense items not affecting operations. We also believe these measures help facilitate comparisons to our competitors' operating results.
Set forth below is a reconciliation of our reported net income attributable to common stockholders to earnings excluding special items and our GAAP diluted earnings per share to diluted earnings per share excluding special items. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
(Dollars in millions, except diluted EPS) | Three months ended September 30, | ||||||
2024 | 2023 | ||||||
Net Income | Diluted EPS | Net Income | Diluted EPS | ||||
Net income attributable to common stockholders, as reported | $ 117.8 | $ 0.81 | $ 122.0 | $ 0.80 | |||
Pre-tax reconciling items: | |||||||
Gains on divestitures and impairment charges, net | (3.5) | (0.02) | (2.5) | (0.02) | |||
Tax effect from significant items | 1.1 | — | 0.5 | 0.01 | |||
Change in uncertain tax reserves and other | (0.1) | — | (0.9) | (0.01) | |||
Earnings excluding special items and diluted earnings per share excluding special items | $ 115.3 | $ 0.79 | $ 119.1 | $ 0.78 | |||
Diluted weighted average shares outstanding | 146.2 | 152.3 |
(Dollars in millions, except diluted EPS) | Nine months ended September 30, | ||||||
2024 | 2023 | ||||||
Net Income | Diluted EPS | Net Income | Diluted EPS | ||||
Net income attributable to common stockholders, as reported | $ 367.3 | $ 2.50 | $ 398.9 | $ 2.60 | |||
Pre-tax reconciling items: | |||||||
Gains on divestitures and impairment charges, net | (4.8) | (0.03) | (10.2) | (0.07) | |||
Losses on early extinguishment of debt | — | — | 1.1 | 0.01 | |||
Tax effect from significant items | 1.6 | — | 2.5 | 0.02 | |||
Change in uncertain tax reserves and other | (1.0) | — | (1.4) | (0.01) | |||
Earnings excluding special items and diluted earnings per share excluding special items | $ 363.1 | $ 2.47 | $ 390.9 | $ 2.55 | |||
Diluted weighted average shares outstanding | 147.0 | 153.6 |
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SOURCE Service Corporation International
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