EX-99.3 5 a2090447zex-99_3.txt EXHIBIT 99.3 CARRIAGE SERVICES JOHNSON RICE & COMPANY DEATHCARE CONFERENCE OCTOBER 2, 2002 (NYSE: CSV) Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. COMPANY OVERVIEW - Fourth largest publicly traded deathcare company - 149 funeral homes and 30 cemeteries in 29 states - Successful Fresh Start Program largely complete - Upgraded leadership is driving new strategies - Culture of excellence to build a lasting enterprise Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. MISSION STATEMENT We are committed to being the most professional, ethical and highest quality funeral and cemetery service organization in our industry. Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. GUIDING PRINCIPLES - Honesty, Integrity and Quality in all that we do - Hard work, pride of accomplishment and shared success through employee ownership - Belief in the power of people through individual initiative and teamwork - Outstanding service and profitability go hand-in-hand - Growth of the Company is driven by decentralization and partnership Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. KEY ELEMENTS OF FRESH START - Downsize corporate organization - Upgrade corporate and local business leadership - Change preneed funeral marketing strategy - Stratify funeral home and cemetery portfolios - Improve or dispose underperforming businesses - Adjust carrying value of remaining assets - Modify debt covenants Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. REVIEW OF FIVE MAJOR FRESH START GOALS 1) Restore credibility to our operating & consolidation model 2) Increase and better align our earnings & cash flow
1999 2000 2001 2002E ------ ------ ----- ----- EPS $0.39 $0.06* $0.51 $0.42 Recurring free cash flow per share ($0.49) $0.12* $0.83 $0.74
* before special charges related to Fresh Start Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. REVIEW OF FIVE MAJOR FRESH START GOALS 3) Restore market value credibility to balance sheet 4) Reduce debt 5) Reposition company to access capital markets Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. CARRIAGE SERVICES REVIEW OF OPERATING PERFORMANCE Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. ACQUISITION SPENDING ($ in millions) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. REVENUE ($ in millions) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. EPS (Before special and other non-recurring charges) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. EBITDA ($ in millions) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. DEBT & CONTINGENT OBLIGATIONS ($ in millions) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. RECURRING OPERATING FREE CASH FLOW & STOCK PRICE DATA ($ in millions, except stock price) [GRAPH] Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. CARRIAGE SERVICES WHY OWN THIS STOCK? Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. UNIQUE INVESTMENT OPPORTUNITY - CSV existing operations visible and predictable - CSV offers LBO characteristics without promotion - Favorable risk/reward profile - Three scenarios with compelling returns Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. LONG-TERM BASE CASE SCENARIO ($ in millions, except per share data)
5-YR. 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 CAGR --------------------------------------------------------------------------------------------------------------------------------- REVENUE 154 154 155 161 166 171 2.1% EBITDA 42 42 42 44 46 48 2.9% EPS, DILUTED 0.42 0.42 0.46 0.55 0.64 0.75 12.2% FCF PER SHARE 0.74 0.72 0.66 0.71 0.84 0.97 5.6% PRE-TAX FCF 13 13 14 18 22 26 15.2% FREE CASH FLOW 13 13 12 13 15 18 7.0% DIVESTITURES & OTHER 0 4 4 0 0 0 NM TOTAL DEBT 150 132 116 104 89 71 -13.7%
Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. BASE CASE ENTERPRISE VALUATION #1 (Estimated $ in millions, except per share data)
12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 --------------------------------------------------------------------------------------------------------------------------------- ENTERPRISE VALUE (EV) DEBT 150 132 116 104 89 71 PREFERRED STOCK 90 90 90 90 90 90 MKT. VALUE EQUITY 53 71 86 99 114 131 --------------------------------------------------------------------------------------------------------------------------------- TOTAL 293 293 293 293 293 293 EBITDA 42 42 42 44 46 48 DILUTED SHARES OUT. 17.6 17.7 17.9 18.1 18.2 18.2 SCENARIO #1: 1 POINT MULTIPLE DECREASE -------------------------------------------------------------------------------------------------------------------------------- EV/EBITDA MULTIPLE 7.0X 7.0X 6.9X 6.6X 6.3X 6.0X IMPLIED STOCK PRICE $3.00 $4.01 $4.82 $5.47 $6.27 $7.21 ANNUAL % INCREASE 34% 20% 13% 15% 15% ------------------------------------------------------------------ 5 - YEAR COMPOUND IRR = 19%
Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. BASE CASE ENTERPRISE VALUATION #2 (Estimated $ in millions, except per share data)
12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 ---------------------------------------------------------------------------------------------------------------- ENTERPRISE VALUE (EV) DEBT 150 132 116 104 89 71 PREFERRED STOCK 90 90 90 90 90 90 MKT. VALUE EQUITY 53 71 86 99 114 131 ---------------------------------------------------------------------------------------------------------------- TOTAL 293 293 293 293 293 293 EBITDA 42 42 42 44 46 48 DILUTED SHARES OUT. 17.6 17.7 17.9 18.1 18.2 18.2 SCENARIO #2: FLAT MULTIPLE ---------------------------------------------------------------------------------------------------------------- EV/EBITDA MULTIPLE 7.0X 7.0X 7.0X 7.0X 7.0X 7.0X IMPLIED ENTERPRISE VALUE 293 290 294 307 322 337 IMPLIED STOCK PRICE $3.00 $3.84 $4.90 $6.29 $7.88 $9.66 ANNUAL % INCREASE 28% 28% 28% 25% 22% ----------------------------------------------------------------- 5 - YEAR COMPOUND IRR = 26%
Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. BASE CASE ENTERPRISE VALUATION #3 (Estimated $ in millions, except per share data)
12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 ------------------------------------------------------------------------------------------------------------------------------ ENTERPRISE VALUE (EV) DEBT 150 132 116 104 89 71 PREFERRED STOCK 90 90 90 90 90 90 MKT. VALUE EQUITY 53 71 86 99 114 131 ------------------------------------------------------------------------------------------------------------------------------ TOTAL 293 293 293 293 293 293 EBITDA 42 42 42 44 46 48 DILUTED SHARES OUT. 17.6 17.7 17.9 18.1 18.2 18.2 SCENARIO #3: 1 POINT MULTIPLE INCREASE ------------------------------------------------------------------------------------------------------------------------------ EV/EBITDA MULTIPLE 7.0X 7.2X 7.4X 7.6X 7.8X 8.0X IMPLIED ENTERPRISE VALUE 293 298 311 334 359 386 IMPLIED STOCK PRICE $3.00 $4.31 $5.84 $7.76 $9.92 $12.31 ANNUAL % INCREASE 44% 36% 33% 28% 24% ---------------------------------------------------------------- 5 - YEAR COMPOUND IRR = 32%
Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. CARRIAGE SERVICES A unique investment opportunity... THANK YOU! Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation. FORWARD-LOOKING INFORMATION In addition to historical information, this presentation contains forward-looking statements made by the management of Carriage Services, Inc. (the "Company"or "Carriage"). Such statements are typically identified by terms expressing future expectations or goals. These forward-looking statements, although made in good faith, are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include Carriage's inability to sell businesses and properties for the estimated proceeds, to achieve the free cash flow from operations in the base casescenario, or to achieve internal growth from our businesses; adverse changes in economic and financial market conditions, increasing interest rates, and restricted credit availability; lower death rates; changing consumer preferences; competition in our markets from new entrants and existing business competitors; Carriage's inability to maintain operating ratios within the limits set forth within our financing arrangements; and changes in government regulation of the death care industry. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision of these forward-looking statements. Readers should carefully review the Cautionary Statements described in this and other documents we file from time to time with the Securities and Exchange Commission, including Annual Reports on Form 10-K and Current Reports on Form 8-K filed by Carriage in the future. Copyright 2002(C) Carriage Services, Inc. All rights reserved Forward-looking statements contained herein are subject to certain risks and uncertainties as further described in the last slide in this presentation.