Good morning, ladies and gentlemen. And welcome to the Carriage Services’ Year End 2019 Earnings Webcast. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Viki Blinderman. Senior Vice President and Chief Accounting Officer. Thank you. Please go ahead.

Thank you and good morning, everyone. Today, we will be discussing the company’s year end quarter results for 2019. Our related earnings release was made public yesterday after the market closed. Carriage Services has posted the press release, including supplemental financial tables and information on the Investors page of our website. This audio conference is being recorded and an archive will be made available on our website later today through February 25th. Replay information for the call can be found in the press release distributed yesterday. On the call today from management are Mel Payne, Chairman, and Chief Executive Officer, Bill Goetz, President and Chief Operating Officer, Ben Brink, Chief Financial Officer. Today’s call will begin with formal remarks from management followed by a question-and-answer period. Please note that during the call, we will make forward-looking statements in accordance with the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical information should be deemed to be forward-looking statements. These statements include but are not limited to statements regarding recently closed acquisition, the anticipated cost savings, operational improvements and other benefits related to the acquisition and the effect of such acquisitions on the company's financial performance, our milestone three year scenario, any projections of earnings, revenues, asset sale, cash flow, debt levels or other financial items., any statements of planned strategies and objectives of management for future operations, acquisition and divestiture activities and financing activities. Any statements regarding future economic and market conditions or performance any statements of belief and any statements of assumptions underlying any of the foregoing. Forward looking statements contained herein regarding the performance of our same store and acquisition businesses include assumptions related to future revenue growth. We can provide no assurances that our same store and acquisition businesses will generate the revenue growth discussed today or any revenue growth at all. I’d like to call your attention to the risk associated with these statements, which are more fully described in the company’s report filed on Form 10-K and other filings with the Securities and Exchange Commission. Forward-looking statements, assumptions or factors stated or referred to on this conference call, are based on information available to Carriage Services as of today. We expressly disclaims any duty to provide updates to these forward-looking statements, assumptions or other factors after the date of this call to reflect the occurrence of events, circumstances or changes in expectations. Furthermore, during the course of the morning’s call, we will reference certain non-GAAP financial performance measures. Management’s opinion regarding the usefulness of such measures together with the reconciliation of such measures to the most directly comparable GAAP measures for historical periods are included in the press release and the company’s filings with the SEC. Now, I’d like to turn the call over to Mel.

Thank you, Viki. Over the last five years and especially over the 2017, 2018 period after I had promoted members of the senior leadership team into executive positions and we suffered a performance decline in our portfolio, it became very obvious that we did not have within the company the executive leadership that we needed for the future. So I retained a boutique executive recruiting firm. I honestly did not think I would be able to find someone because my qualifications were extremely high and I just had to go through an incredible vetting process, both at the board level and the senior leadership within the company and at the field level. So we got lucky and in December we made a bold strategic move I think that will serve this company well for years to come. And at this time I'd like for Bill Goetz to report to you. How he has settled into Carriage and what he's found compared to what he perceived. Bill?

Great. Thank you, Mel and good morning everybody. First of all I appreciate your interest in Carriage and what I thought I would do this morning as Mel just mentioned is talk a little bit about what I've seen over the last 75 days of course. I have a lot to learn. Spend a lot of time in the business but that would be the first thing. Just give you an overview what I've seen over the last 75 days and also talk a little bit about as a leadership team, some of the strategic opportunities that we've identified and talk about how we're going to go after those opportunities. So going back to December, I was on the call on December 3rd after I joined on December 2nd. And I shared three reasons why Carriage was so attractive to me and I just want to kind of give you my assessment after being in the business the last 75 days. First of all the main reason to join Carriage was really this great culture, great people, great leaders. And over the last 75 days I have visited more of our businesses. In fact, last week I was out in California at two of our great businesses, one being Canao mountain, the other one being Heritage Deal Day in Huntington Beach. And again, I walked away just impressed with the businesses that we have, impressed with the people that are leading those businesses. And everyone just involved in servicing those families in those communities. I also had the privilege to attend a Standards Council meeting and that was again just very eye opening to see the talent in the room and not only the talent but the commitment of that team and all of our leaders to continue to make…

Thank you, Bill. Bill get to enjoy and participate in his first Carriage board meeting yesterday and I've got a lot of feedback Bill after the board meeting, from the board members. But I guess the most insightful feedback was from a young money manager that we turned over $20 million. Young guy, he's got brilliant ideas. He's done really well. And one of the things he wanted to do was to become a board observer in Carriage to improve his knowledge of how value is created. You know then we went into a turnaround mode and told about that. So he called me on my way home last night and he said Mel I got I've some board observer feedback and it's kind of an apifiny. He said sitting there in the room and I've been sitting there now for almost two years, I noticed from your senior leadership team, executive team and there are 10 of us including Bill and I, all in the room and the six board members that Bill through his executive presence, through his articulation of different things, whatever the subject might be has raised the game for the entire board meeting and each one of the players, he said I have this insight and I couldn't wait to share it with you. So I'm going Wow, thank you Jay. That's just I'm going to take that and change the sequence of our presentation on the call tomorrow. So thank you Bill for already making a difference. You raised the game, you raised the anti and I think the people in the field are excited about your leadership. I know I am. And we look forward to many, many, many high performance victories in the future. Before I turn the call over to Ben…

Thank you, Mel. Thank you, Bill. Our results for Carriage Services 2019 back to the future, a new beginning part to demonstrated an incredible amount of progress in just one year as we return to organic revenue growth in our funeral home businesses, had a record performance year in our cemetery segment, significantly improved consolidated EBITDA margins and produce a record adjusted consolidated EBITDA for the year. While our operating performance in the fourth quarter was short of our expectations, the strategic moves we made in the fourth quarter to complete the four large acquisitions and large strategic markets, along with the addition of Bill, as President COO has positioned Carriage like no other time in our history for performance and value creation success over the next five years. And now for our results. For the full year, total revenue increased 4.2% to $273.3 million. Total Field EBITDA increased $7.4 million to $110.3 million. Total Field EBITDA margin increased 120 basis points to 40.4%. Consolidated EBITDA increased $8.2 million or 12% to $76.5 million and adjusted consolidated EBITDA margin increased to 200 basis points to 28%. Again, recapturing what we had lost in that 2017, 2018 timeframe a portion of it. And then diluted earnings per share increased $0.27 or 29% to a $20. For the fourth quarter total revenue increased 7.3% to $71.1 million. Consolidated EBITDA increased 17.7% to $19.2 million and our margins increased in the fourth quarter 240 basis points to 27%. Adjusted diluted EPS for the quarter was $0.29, an increase of 26.1% year-over-year. And our same store funeral home segment, the full year revenue increased 0.2% to $157.2 million, on strong growth in the number of families we served at 2.3%. This small increase in revenue was leveraged into a slightly greater increase in same…

No let me let me just go one more time here Ben. Before we open it up for questions. I do want to say that the future three years looks very attractive but you have to measure that look of attractiveness against the history of the company, the idea of Carriage at some point becoming the best in this industry not the biggest you know always baffle me, how would you measure that and as a as a guy who started out in the high yield business in the 70s and Michael Milken [ph] took to the public markets in the 80s. ou know that was my background and so I knew credit and cash flows. Then I went into banking great bank for five years Texas Commerce Bank became a triple a bank and then turning around companies for 10 years, but I got tired of that and wanted my own company and this is where I got lucky and landed and I loved it because it was a cash flow business and you could lever it but you could also mess it up if you didn't operate right. So my definition of being the best in the industry is a consolidation and operating platform. Over time became creating the most cash margin per dollar of revenue and for us that's a that's a rough estimate of the cash. It's the adjusted consolidated EBITDA after all overhead and you know I learned a lot about that over the years. First it was hard to get past 20 for a lot of years and then you know we got past that and accounting changes and all and then we got up to at some point 24 and at the end of 11 when we had another transition date a lot…

[Operator Instructions] Your first question is from the line of Alex Paris from Barrington Research. Your line is open.

Good morning. This is Chris sitting in for Alex. Thank you Mel, Bill and Ben for all your detailed commentary thus far. Going through some of my notes that I have here could be loosely in regard to Fairfax. Mel you had mentioned in the past about acceleration. In regard to Fairfax its ability to achieve sustain and now with the potential for further acceleration in its business. Could you provide some additional color typically on Fairfax and how this can relate to some of the buckets that Bill mentioned more specifically in regard to capturing best practices and perhaps applying them to other areas of the business?

Yeah Fairfax I know the business well then there are a bunch of times over the years dreamed of one day owning it. I didn't know if we'd ever get the chance it had 14 bidders. We recognize it's been a family business it's been not aggressively managed especially on the cemetery side. And the same. I mean the funeral home opportunity and in that overall area to expand the brand and grow the market share is incredible. But the cemetery opportunity is even better. It just it's just an amazing upside. And it will continue to be amazing for 10 or 20 years. This is the kind of park I always dream someday we would on a on my own. I've seen this kind of park in other companies like Rosehill and SGI and in L.A. others. And you know I always dreamed of having one of those bellwether companies that has incredible margin growth opportunity but also revenue growth both on funeral homes and cemeteries. I'm not sure if I can relate to what you're calling best practices but we will put the talent in here to make it home and it will it will harm once we get it going. It will be worth the price we paid which was dear and it will be a return on invested capital that will just grow and grow and grow. It's the kind of business that you know Warren Buffett talks about you want to buy businesses where beyond you want to buy it. You want to buy a good business at a fair price. Well this is not a good business at a fair price. We bought a great franchise at a high price and the great franchise has been under managed massively improperly by family that owned…

Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation and have a wonderful day. You may all disconnect.