Good morning, everyone. Welcome to Park Lawn's 2022 Investor Day. For the benefit of people on the phone, my understanding is there's about 40 folks that have joined us on the phone. I know that I think everyone in the room has met each other, and the Park Lawn team is here today. We were either at the event last night or breakfast this morning. For the benefit of those on the phone, as Dan said, I'm Brad Green. Jennifer Hay is our General Counsel, and Mat Forastiere is our Senior Vice President of Operations. Jay Dodds is not here with us. I think it's best to just throw that out of the box. He is fine. His daughter, his 23-year-old, had emergency surgery. Going into that, it could have gone, actually in a very bad direction, and instead it went the best direction it possibly could, and she's going to be fine. But we're far from out of the woods here down to here. She has a great attitude. She had just graduated, actually, from A&M with a degree in marine biology. So she looked at the big scar she had and said, "Cool. I've been bitten by a shark." It shows her what to do. But Jay could have been here, but given what he was dealing with last week and into that, I think that we were fine. He's probably on the phone right now with the other 40 people scared to death about what I might say without him here to keep me on the rails. With that being said, Jennifer has a, I guess the statement that she gets to make. Thanks, Jennifer. This is Park Lawn's first Investor Day. We held a little over four years ago, obviously, kind of a little thing, but all of that except this meeting, many things. This is my first Investor Day ever, and by that I mean the first one I've ever attended as well. Hold on if anything happens. I don't normally speak from notes or slides. I know both of those things. I don't plan to presently do more than 30-35 minutes before I open the floor to Q&A. What happens then is we're going to What happens then is we're going to go over possible questions similar to what we did before. For those of you here in person, we do ask that you please hold your questions until after the presentation. A benefit of actually being here in person. I'm going to start by going through the agenda a little bit today. On the agenda today, obviously, we're going to start out this morning with our breakfast, which we already had. We're going to have the presentation here. Then the big benefit I think, going forward is we're going to start with our tours of our properties. You guys are going to have the opportunity to meet the people who actually make it work. We have Taryn Smith, who's our VP of Operations over this region. We have two of our directors of operations, Harvey Bollinger and Lauren Hogan. Then we have three of our former owners who you guys are gonna be able to meet at our reception center. They're back on the back wall, pictures of them and their businesses, Lynn Gibson, Jason Chambers, and Pam Stevens. From businesses that are around the Nashville area, but not directly in Nashville. Mandy, Pam's daughter, is gonna be there with the grief dog, and we're gonna have some food and a tour of the cemetery. In my humble opinion, I believe that this afternoon is going to be much more beneficial than this morning. All you guys have to do is just get through my statements, and we'll get to the fun stuff. We're gonna start with who we are. To understand who we are, you have to have a little bit of an idea of where we came from. Some of this is going to be repetitive to those of you all who know this and have been with us a while, and some of it is, hopefully is new information. This slide here deals with the industry landscape. I think most everyone knows these names that's up here, with SCI, of course, being by far the largest company in our space. The largest consolidator in our space. If you look, Park Lawn, with the number of locations we have now, we are the second largest company in our industry. These players you see up here on the screen, those normally are the folks that we are getting to competitive situations or competitive bids with. Even though given the number of funeral homes and cemeteries that exist in the United States, these are really the people that we come up against the most when we're in a competitive bid situation on M&A. It's actually kind of a small group if you think about it. Now, there are some smaller players out there, regional players, and some of them won't be around by the time we have a next investor presentation. Some of them you have to pay close attention to because they will punch above their weight really quickly. We do deal with some folks that are more regionalized in nature. They're very good operators. This is our group. Obviously, 80% of the funeral homes and cemeteries that are still out there are independent. That leaves a lot of room for growth, and we'll talk about that shortly. I wanna start by going over our growth over the last 5 years. In order to do that, Park Lawn is really a tale of two companies, and I've been talking about this for a number of years. Given the fact that this is our first Investor Day, it's kinda. I was telling our group, this is kinda me putting, you know, kinda putting our flag in the ground and saying, "This is where we're starting from." I'm gonna go over a little bit of the history. When I talk about the unprecedented growth, I think these slides and the information I'm going to add to it will go a long way to explaining how big we've gotten. Are we getting back to that? Hold on just a second, guys. When we get back to the Park Lawn 2017, I'm just gonna chat and I'll get back to it in a minute. As you guys know, Park Lawn started in 1915. All right? I'm not gonna go through a history of 1915, but it was a single cemetery for about 87 years. Then, Park Lawn bought five cemeteries in 2002 in the Greater Toronto Area. Right? Basically, for that period of time, up to it buying Tubman's, its first funeral home in 2014, it basically sat as a single cemetery company for almost 100 years. The consolidation really began in 2014. Are we gonna be able to get back to that, guys? Hold on just a second, folks. There we go. Park Lawn 2017, 81 locations, 28 funeral homes and 53 cemeteries by the end of 2017. It started by buying its first funeral home in 2014. If you think about that in 2014 to today, SCI is 61 years old as far as doing consolidation. Carriage Services is 32 years old, and Park Lawn is eight years old. Almost all of the consolidators that I showed you on the industry landscape slide were making acquisitions long before Park Lawn did its first one in 2014, yet we're the second largest funeral home and cemetery consolidator in our industry. I'm gonna put a pin in that for a second and go to the tail of the second company, which will be the next slide. Do you all want me to do it or are y'all gonna do it from back there? I got it. All right. Again, Park Lawn in 2017 versus The Signature Group in 2017. By the end of 2017, The Signature Group had 30 locations, 21 funeral homes and nine cemeteries. Jay Dodds and I started the company with a simple concept in 2012, and we bought eight funeral homes and three cemeteries with our own money, and that was, we're just gonna run it like an independent. We believed if we did that, if we ran these businesses like an independent, the thesis was that the acquisition candidates would come to us. We believed at the time that, and this is not being disparaging to the other people out there, but we believed at the time that there was a group of people, independent funeral home owners, who wanted to join a company that acted like them after they joined the company. You're gonna hear a lot about that today when we're at Harpeth Hills from three owners that are gonna get up there from three different places, three different areas in their lives, three different ages, and they're gonna tell you what it meant for them to join Park Lawn. Our thesis was that if we built this company and ran it like an independent, then we would have these acquisitions come to us. I'm gonna jump forward and talk about one Park Lawn. We joined Park Lawn, The Signature Group did, in May of 2018, and by the end of 2018, we had 111 locations, obviously, by combining these two businesses and buying some more in 2018. Why did we combine these two businesses? Why did Jay and I take something that was so important to us and put it in a larger publicly traded company? Very simple. One company had access to capital with no management team, and the other company had a management team with no access to capital. That's as pure as it gets, right? We said, "Okay, let's put these two things together and see what happens." I often talk about the executive team that's at this company. I wanna do it again now but be more specific about it. There are 10 of us that are on the executive team. eight of us have been together as a group for over a decade in the similar capacity that we're in now. Obviously, I talked about Jay and I, we met in 2006. Clarke Harlow, who works closely with Dan, who was our CFO at The Signature Group, started working with Jay in 1998. Lorie Johnson, who's our VP of HR, is not here. She started working with me in 1988. Matt Forastiere started working with Jay in 1999. I'd like to point out that all of that was many, many, many years before Park Lawn bought its first funeral home, and in most of the time, it still just had one cemetery. That was the group that was at The Signature Group when Park Lawn and The Signature Group merged. Half of the executive team was already there. Jeff Parker, our Chief Technology Officer, joined us in June of 2018. He had worked with Jay since 1988. Jennifer joined us in, what, was it October of 2018, I think. She had worked with me since 2004. Brian Stanton, who heads our acquisitions, joined us in December 2018. He had worked with us in 2006. Again, eight of the 10 executives, right, were with Park Lawn by the end of 2018. Then we added Dan sometime after that. I can't remember. September 2020. Yeah, whatever. We had to add a resident Canadian, and we ended up with this one, and we're now stuck with him. The other executive we have is Bill Hudson, who actually helps with acquisitions. He recently joined us about a year ago. My point in all of that was most of us have worked together for over 20 years in some capacity, and this group had been together running funeral homes and cemeteries, since you know, the 2006, 2007 time period. When I'm asked, "So when you took over as the CEO in early 2020, you know, what changed?" Well, the answer is nothing. The growth that you've seen that started in 2018 was based on the management team that's in place today. Everybody follow me so far on that? Good. All right. By the end of 2018, I'm sorry. We have 167 locations, 67 funeral homes and 100 cemeteries. By 2019, we grow 205 locations, 97 funeral homes, and 108 cemeteries. Now, what's interesting about this year, it's a pre-COVID year, but many people have asked about our corporate expenses and our corporate growth. This is where we realized as a group we had two competing things going on. We had legacy company integration. You've all heard me talk about that over time, where we've taken these pre-Signature Group acquisitions and pulled them into the company. We also had. We were an operating company that was going through acquisitions, so we were layering on acquisitions at the same time. 2019 saw significant growth in our corporate function, and I think we've done a pretty good job through 2020, 2021 and 2022 of seeing just incremental growth in that. We really built the infrastructure of the company to grow at the rate that we have in 2019. By 2020, we have 239 locations. You all see the funeral homes are catching up to the cemeteries. By 2021, 273 locations. Now we have more funeral homes than cemeteries. Right now we're sitting at 293 with 13 more funeral homes than we have cemeteries. Truly unprecedented growth for our industry. I'll just kind of stop here. This summarizes our acquisition spend over those years with the number of transactions that we've added. Again, I would like to put in perspective, if you look at Park Lawn as an 8-year-old, and you think about Carriage Services being over 30 and SCI being over 60, and us having this number of locations in this period of time, it is truly unprecedented growth that's ever happened in our industry. It's not growing through whatever we can buy. It's not spending too much money. It's not buying funeral homes and cemeteries we shouldn't own. It's buying the things that we should own and operating them appropriately. Just another slide that will help, hopefully, real quickly. 2017, 700 employees, 13,000 families served. We have 2,500 employees now serving 58,000 families. Again, the impact of that for those of y'all who obviously all work and have employees, we quadrupled the size of our employee base in that period of time, which took a little bit of effort, but again, fairly significant growth. All right. Where are we going? How do we get there? I like that saying. Evolving for the future. Our second quarter results were fairly well documented, and I'm sure that some people will have some questions on them today, and we'll be happy to answer them. We've been pretty transparent about looking for issues that might have existed in the second quarter or as a result of the second quarter. As the leader of the company, I'm responsible for the results that come out every time. Everyone knows that. That's why you have CEO at the end of your title. I just went through the significant growth that we experienced during this period of time, and I took over as CEO just a few months before the pandemic started. The environment going into the pandemic changed just as quickly as coming out of it. The criticism could be and should be that I should have anticipated that coming out of the pandemic, things would change more quickly than I did. It was my job to turn around and have people refocus on how we were acting during the pandemic versus post-pandemic. While nothing was wrong and nothing is wrong, and nothing's responsible for our second quarter results, I should have taken an opportunity to refocus us post-COVID, and that sits on me. The benefit of realizing that is that you can turn around and realize what you've done and move forward from that. I could attribute some of the problems we've had this year with just growing pains, not having the infrastructure to handle this size. That would be an excuse because I think we could have done a little bit better job in the second quarter. Before I talk about evolving for the future, I want to remind everyone about our operating model because it'll make sense to some of the changes we've recently made. We are very decentralized on the front of our house. You will hear from these former owners today, and I would encourage you to ask them questions today and then tonight when you're around them. We don't change the name of the funeral home. We keep every employee almost every time. The community should know we're there. We don't brand it. We don't have a logo. We don't come in with a team. From the front of the house forward, we very much act like an independent. We hope that the community doesn't even know we're there other than improving the business. On the back of the house, we're very centralized, so accounting, HR, legal, payroll, insurance, all those things we try to take off of the business so that they can spend their time in the communities, and we can spend our time training them. Everybody follow me so far? That's kind of our model. We believe that allows the funeral homes to keep their identity, that allows us to also grow market share and help them grow market share. We're right in the middle of the two other large publicly traded companies' operating models, in my opinion. One of them is very centralized, and one of them is very decentralized, and I think we're right in the middle of both, and we do that on purpose. We have a very flat structure, I mean, extremely flat for a company this size. You will actually meet everyone who falls in this category today. You have Jay Ives, who's the Chief Operating Officer. He has VPs of Ops. There's six of them. You'll meet one of them today, Karen. Those folks have directors of operations, and you have folks that are actually running the funeral homes and cemeteries. That's it. You have managers who report through the VPs of Ops, and the VPs of Ops report to Jay. Our funeral home managers are literally one step away from the chief operating officer. We do that on purpose so that we can touch these businesses very personally every day. Again, that's the whole theory, going back to The Signature Group, where we're running them like an independent. All right, evolving for the future. Coming out of COVID, and then looking at the second quarter, I came to the realization that by necessity, everything was flowing through operations in the company. By everything, I mean, truly, if it wasn't a corporate back office function, operations was touching everything. That allowed us, in my opinion, to lose focus a little bit, and I call it the blocking and tackling, an American football analogy, not a soccer one. As we were dealing with COVID, people being sick, businesses shutting down, things just tended to gravitate to Jay and Matt and their team because the businesses had to run, so everything kind of funneled through them. Coming out of COVID, I realized that we needed to refocus it a little bit. What we did, I like to call it realigned operations and sales. We took the VPs of sales and had them reporting directly to the VPs of ops. I removed the non-operating responsibility out of operations, and we'll talk about that on the strategy and people development side. This allowed us to have an operational focus back to our ownership mentality and supporting our local management. This is a slide. If I were telling you guys, what we did, is we just turned around and said, "Okay, what made us good? Let's go back to doing that." What made us good? Operators who are acting like operators, and let's focus on the back office stuff, where it needs to be, right? That make sense? Not a big change, but moving the sales to report directly to operations coming out of the second quarter, we've seen a streamline of our ability to deal, with how we're marketing, things of that nature. Business growth, supporting technology. You guys have heard about this for many months, if not years now. Had I had my choice, you wouldn't have known about it, and Irene would have had nothing to ask me call after call again, because we would have been building this behind the scenes. Excuse me. Obviously, as a result of the lawsuit, people learned that we were building FaCTS. Now is the time to get excited about this. If you think about it, I told you guys that when the Signature Group joined Park Lawn, we put these two companies together, and we're starting to integrate the legacy businesses. What did not exist is a backbone. We had higher visibility when Matt's doing this. You'll learn that Matt ran our Michigan businesses, and he ran our Kansas City businesses before we brought him back to Houston. His family loves me for moving him around once every 18 months. We had higher visibility running those 30 businesses than we did ever through probably the beginning of this year. Now, that's not a problem, but what you want to have when you're touching these businesses the way that our model works, is you wanna have real-time visibility on all of our KPIs. What is that business doing that day? FaCTS brings that to us. Management of daily activities, we'll talk about this some later today. Being able to see the average revenue per contract, what our discounts are doing, where our deposits are going, what our commissions are doing, what the large sales are doing. We can drill down and see that on a rooftop-by-rooftop basis on proprietary software that we built, right? Application programming interface. This is where it starts getting over my head a little bit. Single point of entry. Our system talks to our other systems. CRM, scheduling, inventory, our online digital presence, all of that stuff is coming into focus under one proprietary software. Of course, that really matters for our financial reporting, trust management, expedited financial statements, payroll management. There's a little dot under there that I took off, and Dan is still agitated. Do you wanna say it? Go ahead and tell them. No, I'm not gonna say it. Okay, well. No, I'm not gonna say it. I don't remember what it was. This should allow us to improve our public disclosures, right? For those of you who follow SCI, those guys know what they're doing, and they have a lot of data, right? Y'all read their reports, y'all listen to their earnings calls. I know you do because you ask me the same questions that they're being asked, right? They have a high level of detail because they're smart, and they have the ability to pull that out of their systems. We're gonna be able to do that too. We just haven't had the visibility that we not only needed to run it from an operational perspective, but also to disclose some of that stuff. Don't ask me when. As soon as we can, we'll get it out to you guys because it's the same stuff that we're gonna use in managing the business. This should resonate with this group because there's nothing but upside there, right? We've been running these businesses on a rooftop by rooftop basis. We're an operating company first. You'll get that feel today when you're out. We are all out there as a management team frequently in our businesses, and we haven't had this type of visibility on our numbers. It's only going to allow us to improve our businesses. Did I say something wrong? Jennifer, you're looking at me like I did something wrong. All right, making sure I'm on track then. Strategy and people development. When I mentioned that we moved the non-operating responsibilities out of operations, this is where this falls, and it's not a small deal. In my mind, it's a big deal and probably the biggest change we've made since the second quarter. We need a robust training and development function. We have one. We have a learning management system. We have the Park Lawn Way, which is our leadership training, and our leadership development. Basically, what we're building is called Park Lawn University. I'm gonna go back to blocking and tackling. I wanted to see boots on the ground, real training and development. We're beefing up our training and development department. Our new business integration, given the growth that we've had and the growth that we anticipate going forward, operations, again, through my group with the acquisitions, we're doing the business integrations, and we realize we're doing so many of them in a rapid succession, and it's so important that we get it right that we're building a team to do just the integrations. Again, employee onboarding, administrative support. Then just the culture of the company. When you go from 700 employees, I effectively know them all, to 2,500, and we go from locations that we can get around to, you know, every few months to having, you know, you can't, right? I mean, maybe you can't even do it in a year if you try to. It's very important to drill that culture down. We basically created this group and also added an officer position to the company. Recognizing an individual that has worked with us worked with Jay and Dan and I very closely doing investor relations, working on acquisitions, basically upping her game. The last time I will introduce Jennifer as our general counsel was this morning. She's now our chief strategy officer and general counsel. Join me in congratulating Jennifer for her in her new role. I've worked with her as a young lawyer for a very long time, and it's kinda cool to see that happen because we both went from litigators to doing this. She's gonna be in charge of a very important role in our company going forward. Evolving for the future, why did we put this slide up here? In my mind, we're saying, okay, we went from the number of locations we had in 2018 when we planned these companies together into a company that's gonna have 300 locations by the end of the year, right? If we're having that and we plan on growing as we're gonna talk about with our aspirational goals, what do we do to tweak it? In my mind, some of these are small changes, the last one being a larger change, having FaCTS come on board. We anticipated that when we started building it in 2018. I wouldn't call it growing pains as much as just, truly evolving into a larger company. Because as we continue to grow and as this and our investment thesis proves itself out, I believe that the growth that you've seen from 2018 was just gonna repeat itself over the next few years, and we gotta be ready for that. Aspirational growth targets. Everyone in this room has probably seen this, and this is what we plan on being by the end of 2026, which is effectively doubling the size of the company. We believe this is still very attainable. Our stock price does not impact our ability to grow. And we believe that this is the path that we all talk about all the time, and this is where we're heading. We often get asked the question, "How are you gonna do that?" Right? We say acquisition growth about 70%, organic growth about 30% is gonna get us to the EBITDA of CAD 150 million. How do we get there? Interesting. Obviously, it's acquisition driven. When people say, "How are you gonna do it?" I say, "Well, we've been doing it, and we've been doing it since 2018." SCI Senior VP of Business Development said in their investor day, and I quote, "We feel that acquisitions are our best use of capital as a company." He's a very smart guy, and I agree with him 100%. It's our best use of capital as well. They recently changed their target to be $75 million-$125 million a year in acquisitions. The same as ours, right? In their world, they effectively have unlimited access to capital compared to us, right? I mean, I get jealous at times about how quickly they're able to amass capital. Yet, they're the largest company in our industry, and they're telling you as investors in the market that they're gonna grow at the same rate we are. The reason for that is that is a significant growth rate, right? For us for sure, but for them as well. It's interesting to me, if you think about it, a company that's 10 times our size, that's in the same industry we are, who's a consolidator as well, is looking to grow at the same rate that we are. The way that we're able to do this many times is we're self-sourcing these deals. We're often not the highest bidder, and it's often not competitive situations that we find ourselves in. Most of the time, the people on that industry list that I showed you in the industry landscape. Most of the time they learn about these businesses for sale when we announce that they've been sold, right? That's a very unique place to be, and it's something that we're protective and proud of. How are we doing that? I talked to you guys about the operating model, the flat structure. It really should have been here, but I moved it up a little bit earlier, so you'd understand the changes we made. That matters to people. You're gonna hear that today from Jason, Lynn, and Pam. They're going to tell you in their own words why they joined Park Lawn and, without, you know, unscripted how they feel about it, and you're gonna be able to ask them questions. I think you will learn that the operating model and how we touch things means a lot to certain people in this profession. As a result of that, we will be able to do that $75 million-$125 million a year every year because there's people that wanna be like us. There are some people that don't care. There are some people that will sell it to the highest bidder. There are some people that they don't care what happens to their business after they sell it. They're not for us, and we can vet those folks out fairly quickly. which gets me to the next point, naturally aligned acquisitions. We own funeral homes and cemeteries. That sounds like an obvious statement to me, but that is pushed down from the executive team all the way down to the lowest level of our organization, and we'll talk about that again a little bit this afternoon as well when the former owners are with us. By that I mean, funeral homes are very highly relationship-driven businesses, where cemeteries are more heritage-driven. These are multigenerational businesses, right? You have to get to know them. Everyone on this executive team, all the way down to management, physically goes out and sees these businesses, right? What does that mean? Jay and I have met with everybody who's joined this company at least once, and most of the time, multiple times in their location personally. I go to every employee onboarding personally. Now, people will say, "You, well, you can't do that as you get bigger." Well, why not, right? So we do 4, 8, 10 of these a year. Of course, I can, right? What's more important that day? Going to an investor day with Park Lawn, with you guys? Absolutely not. If I had an acquisition to do, I'd tell you guys, peace out, and I'd be gone, right? I mean, that's what matters. And so we go to those, and it really is driven down to us. By doing that, by being naturally aligned with our acquisitions, we have zero angry former owners. I challenge any of our consolidators to say that back to any investors, because if they say that, I'll give them a list of their own angry former owners, right? We don't have any of those because we take the time to get to know who these people are. We take the time to get to know what their aspirations are and what their expectations are so we can meet them. If we can't, we just don't buy the business, right? Which is going to allow us to continue this growth rate as we move out. Disciplined decision-making. I was telling someone the story last night. We target low to mid-teens IRRs. There are plenty of opportunities out there. COVID has caused people to think about succession planning in a different way. Having said that, our capital, our access to capital is not unlimited. I believe if we wanted to do a large acquisition, we could go back to the market even in this environment and raise capital if we needed to. We certainly have the ability to increase our debt. We showed that we had ability to do things through our unsecured ventures or hybrids. We have ability to get to capital. That doesn't mean that I get to spend it without paying attention to what we're doing. We just passed on a deal that one of the private equity backed players came in and offered amount of money that I would just say is obscene. Okay? It was painful to let that go because it would have made a difference in 2022. We pushed the envelope as far as we were willing to do it. When I realized where the price was gonna go, we had a quick executive management phone call, and everyone said, "It's not worth it." We turn around, and we walk away. It's not only the deals that are easy to make that decision on, the ones that get ridiculous, we're gonna let those pass because we're just gonna move on to the next one because there's plenty of opportunity. We are very disciplined with our capital. We take good businesses and make them better. I'm gonna go to the next slide and talk about that. I want to point out this little graphic real quick, though. The population growth, 2020-2025. Look at where we are buying businesses. Our population growth, both total population and 65+, we actually beat the U.S. It's no accident. We pay very close attention to the demographics of where we buy businesses, and we'll talk about that as well. Some folks think that buying businesses in rural markets is not a good idea. They're wrong, and we'll be able to point that out to you in just a little bit on some other topics. With that, I think I covered that. Take good businesses and make them better. If you look at where we've grown, it almost looks like we're targeting a certain part of the United States. It's really not the way it works. When we came in and we bought the big businesses here in Nashville, it caused people to turn around and go, "Well, why did they do that?" Right? Similar to when we bought Horan in Denver. You'll see some growth coming in Colorado shortly. As we start buying businesses in these markets, it causes people to turn around and say, "Well, who is Park Lawn?" They pick up the phone, they start calling folks. If you don't have angry former owners or you have people that are very excited about joining your business, they will actually recruit businesses for you. It happens to us all the time, right? Horan & McConaty business we bought in 2019, am I right? Probably was on everyone's. If it wasn't number one, it was number two on all the consolidators' wish list. Extremely well-run, well-regarded business. It was a highly competitive bidding situation between the other publicly traded companies, and we weren't even the second highest bidder, right? John joined our company. The guy who owned part of the company with him is a gentleman by the name of Darren Forbes. Darren Forbes is gonna retire. He now runs our largest region, continues to work for us, and was flying around with Jennifer and I two weeks ago, visiting acquisition candidates, right? He, he's gonna retire. Now all of a sudden, Darren Forbes is going to me saying, "Oh, I told my business to these guys, and I run Colorado, Kansas, Missouri, and New Mexico." Right? Thank you for that. I mean, he runs and loves it. Tells people he has more fun doing it, right? Awesome to. Well, how do you do that? How do you buy a Ferrari and get one of the owners to say that you've improved their business? Horan legacy attributes, what were they? Strong leadership, philosophical match to us, great demographics, quality assets, this very strong business. I'm gonna compare that to a different one here in a minute. What do we do to make an already good business a little bit better? We go in and we say, okay, we did centralize the operations. What does that mean? Well, if you're running businesses like that, we see this happen all the time, they have eight or nine rooftops. They will run from a consolidated financial statement, right? They take everything up, and they look at how good they're doing. Well, Matt will tell you, "Neil, that's a bad idea." You have a 10 funeral home market, you look at each rooftop and figure out whether or not they're losing market share, and you give them an owner because that's what independents do, right? They don't look at it as a group, right? But as some of these independents get bigger, they do that. Focus on location leadership, put an owner in each business. The feat awards, the community identifies you with this business. Improve financial performance management. You know what that means? Get more P&L, because most of them have never seen one before. You wanna give someone the ability to understand whether or not they should go out and increase their inventory or talk about prices, give them the data, right? Now, they're not nearly as smart as y'all, and neither am I, when it comes to how to deal with these financials, but you can give them a piece of paper, and you can train these folks on how to look at their financials for their business. Very powerful. One of the things we almost always do is offer sales support and operational support at a level they've never seen before. We've got a pretty robust sales organization. We know how to do that, and so that's one of the things we did at Horan. Scheduling and personnel, I use that as an example. People always wonder how we can make businesses better. When you have 300 locations, you got some ideas on how to schedule folks, right? We've just seen more than they have, and so we implemnnted that here. Now, contrast that with another big business we bought, Cress Funeral Services in Madison. Cress was a market leader with a strong brand, but did not have strong prior leadership, unlike Horan. Premium facilities spread across the market, strong demographics, right? They weren't optimizing it. We see that, and it's not a Ferrari that we need to tweak. It's a Ferrari that needs a new engine, but it's still sitting there, right? We look at that, and literally through the due diligence process, we identify one of the guys who's been there a long time and put him in the manager of that market. He did a great job the day we put him in there, and he's killing it today. All we had to do was identify someone with that ability, and he was sitting right under their nose, and they didn't realize it. Again, focused on location leadership. We're not afraid to talk to them about pricing and margin strategies once we've been there a while. If you listen to Jay, he tells you it's 6-12 months to integrate a funeral home. We do not go in telling employees, raise prices, things of that nature. We look at what they're doing, and then over time, we improve it. Grassroots marketing, this is a place that matters. Again, if you think about an independent and how we deal with independents or how independents market, they don't have a corporate marketing department, right? They don't have a bunch of people telling them what to do. What they do is they take the resources that are at their fingertips in their market, and they go out and they do it. Right? Say again? Yeah, relationship driven. I mean, they go in and they build relationships in their market. They go to the meetings. They do the things that matter in their market. What we do is we sit behind them and say, "What do you need to do that?" Right? Now, we're not gonna give you a marketing plan. We're not gonna give you a program. We're not gonna give you stuff. What do you need to support you in your market? It's very effective when you do grassroots marketing, and that's why we see market share growth in our businesses, which again, I would point out one of the secrets that people try to keep is as some of the consolidators, they buy these businesses, and they know that their market share is going to decline because they can't either keep their people or they can't continue to grow in their market. We don't have that problem at all as in Park Lawn stock. That's not what exists when we buy these businesses. That's a comparison of Horan and Cress. The 30% growth to get to our aspirational goals, we talk about this all the time. The operational improvements we can make along with the capital investments. We talked about grassroots marketing, digital marketing. We help them with pricing, incremental revenue growth over time by just being better. Talked about the KPIs. These are just the things that Jay and Matt and their group does on a daily basis to continue to improve our businesses because we believe that we're an operating company first and foremost. Capital investments, you guys hear about these. We develop mausoleums, cemetery inventory development. We build on-sites and combos. We're looking at one right now that's got Dan super excited. He was asking me about it again this morning. You know, just basically continue to improve our facilities. You're gonna see two of them today, and you're gonna go, "These are nice." Well, they're nice everywhere. We spend a lot of time and a lot of money and effort making sure that our facilities are top-notch. I'm gonna end it by talking about the demographic tailwinds. Everyone's heard about this. We've been talking about this for, I don't know, ten years in our profession. It's coming. The Baby Boomers are here. They're reaching the age that it's going to matter. I think the investment community saw what happened in COVID when you see the incremental death rate increase in a fixed cost business, this is what we have. You see an immediate improvement. You also see what happens when the death rate decreases in a fixed cost business, right? Eventually, the math will catch up, and it's around the corner, right? This is coming. I'll leave it up to other people to pontificate on when it gets here or try to time it. We know that when it gets here, we're gonna be ready because of the size that we are and the size that we're growing into. Did I miss anything, guys, before I turn it over to Q&A? I'm looking at the three. Dan, you're supposed to chirp up if I did anything wrong. Jay's probably screaming at the computer screen right now back in Houston, full-on panic. That ends our prepared remarks. I really would like to open it up more conversational in nature. I was talking to Steve this morning. I'm not really good at talking from slides and notes. That's not the way we do things, certainly not the way we buy businesses, and it's certainly not the way we manage them. I understand this is part of it. I don't like it, but we got through it. Thank y'all for that. It's kind of amusing to me. After the earnings calls, Dan said I couldn't say this, I'm gonna say it anyway. After the earnings calls, I schedule something like 10-15 calls. I schedule 10-15 calls where everyone asks me 98% of the same questions over and over and over again, and which, you know, we sometimes forget that we had answered the question. I on more than one occasion went, "I thought you already asked me that," type thing. What I'd really like to do with that intro and with the folks that are here that took the time to get here, before we do the what I think is gonna be even the more valuable part of our day, is just to open it up to Q&A for me as well as the three sitting to my right, if you have any questions, similar to what y'all throw at me, when we're on the one-on-one calls. I don't know if that's normal after these events, but that's what we're doing today. With that, I'll open. Of course, Irene, you go. Repeat the question? I will. She hasn't asked it yet, Dan. Calm down. On all deals or on that particular one? Okay. The question was, what about the particular deal that we walked away from, had us so excited about it, and then what causes us to walk away from deals, both in that case and in other cases. It was a large business. It had name recognition along the same lines of a Horan, a Cress, the businesses that we're going to see today, Harpeth Hills, all of those are very large independents. It was the size, name recognition, where it sat in the market, what we thought we could do with it, right? It would have gotten y'all's attention. People don't seem to like it when we buy the $5 million and $10 million deals, although I constantly say those are extremely accretive and it's fast. You know, 10 $5 million deals is $50 million. I don't know if y'all follow the math on that. It doesn't always have to be a $50 million one. It makes a difference when you buy these big. It would have been in a new market for us. Why walk away from this one was simple. It was a private equity-backed play, and the multiple was higher than I think I would be in trouble if I even discussed what that level of multiple would be. Okay, they can be stupid with their own money. I've seen that movie before, and I know how it ends. We may own that business again someday anyway, you never know. We just walked away, Irene, for that reason. The reason why we walk away from other businesses, first and foremost, most of the time it's owner motivation, right? Before I really worry about the numbers, we start looking at why are they selling and who are they? Because that whole, being able to integrate them into our culture, being able to, being able to say to you guys, "We don't have any angry former owners." Folks literally ask me, "Who can we call?" I say, "You can call anybody you want." I mean, we don't have a do not call former owner list. When we bought Shackelford's, which is in western Tennessee, without talking to me at all, Robert picked up the phone and called all three former owners you're going to meet today, right? said, "What's your experience been like? Tell us about it." All of them offered to come meet him personally to tell him how good it was to join Park Lawn. You can't buy that marketing, right? That's it. I mean, that gets you there. But if you have the wrong owner. Or you run the wrong company to join, and they pick up the phone and they call that person and they're angry, that isn't gonna help you a lot. So owner motivation, why are they selling? Why are they getting out? Then we start looking at the specifics of the business. You know, it doesn't take an MBA from Harvard to figure out you're looking for. You want the number one or number two in the market. Is it growing? What do the demographics look like? Can you help them with pricing? What do the buildings look like? What are you gonna have to put in there? All of those things that I think applies to any other business that anyone else is trying to roll up. What does it look like from a financial perspective? More importantly for us probably is where are the demographics of that going? Right? If I'm buying one and it's got a 35% cremation rate right now, what do we anticipate that's gonna be? How do we model that in? Things of that nature. I've been rambling a bit. Owner motivation, number one. From there, we go to look at the specifics of the business and whether or not it will fit for us. Sometimes that's a very quick decision. We spend a lot of time modeling businesses to get to know. I just feel like it's healthy. That's what. We have a very good corporate development team, and they don't mind putting together models, sweating it out for us to say no. I think everyone in this room knows what that's like. I think that's what y'all do on a daily basis, right? You build it, you decide whether or not you wanna invest in it. You spend a lot of time, and sometimes no works. I called one of my board members because I was very frustrated about losing that larger business. Y'all know him, everyone does, Steve Scott. I go through the whole thing with him, and he said, "Brad, you know you're judged most by the businesses you don't buy, not the ones you do." I've repeated that to a lot of people. I thought, "You know, he's right. We're walking away." Yes, sir. Okay. When we're sourcing the acquisitions, do we have a preference on new markets versus old markets and are there places that we wanna be? I do not have a preference on new markets versus old markets, but it will impact the size of the business. If there's a small business in Western Tennessee that comes up, we will look at that because we're in Western Tennessee now, right? If a small business comes up in Western Ohio, no, because it's not big enough for us to put a footprint in, put the right people in, and manage from there, right? Now then you'll say, "Well, wait a minute. You just bought not a big business in Virginia." Well, it's this far from Bristol, Tennessee, quite literally, right? Yeah, it was in Virginia, but we could, you know, we throw a baseball and hit it. I'm less concerned about new market and old market as far as whether they're new and old. It depends on the size of the business of whether I'll go into a new market. You see us filling in the dots or filling in the states where we already are. Two things cause that. What amount of people wanting to join when they realize that other people are happy, so they come to us. Or if you wanna sell to us and you're bringing in new business, it will be our focus more than over a brokered business. When we look at new markets, it's gonna have to be bigger, big enough to do that in. I mean, we've looked at, I mentioned the one we walked away from would have been a new market, but we're also looking at another new market that I hope to be able to tell you all about by the end of the year. Everyone in this room knows how acquisitions work. It's not done till it's done. No preference new over old except for size. What was the second part? I forgot, I think. Oh, new markets? Right. I am extremely aggressive when things come up for sale in Canada, okay? Why is that? I make this joke all the time, and y'all see me in jeans and boots standing in front of you. You'll always see me in jeans and boots. I'm a born and raised Texan. I love being Canadian, right? Y'all have the markets right. I have investors that have been around for a long time. I'm not getting screamed at when things aren't my fault. When they are my fault, I get constructive criticism. I like the board. I mean, being Canadian matters, right? We're the largest publicly traded company in Canada in this ghost space. We're the largest company in Canada in this ghost space, except for SCI is actually bigger up there than we are. That infuriates me because they're not Canadian. When something comes up in Canada, we'll be very aggressive. It doesn't happen as often, right? Anytime we get anywhere near the coast, the price of the real estate gets to be an interesting issue for us and because we like to own the dirt. I've now gotten past owning the dirt, so we're now in Canada. No, I look to... We try to be very aggressive when businesses come up there because I think that is consistent with who we are. I mean, we have a maple leaf on our logo, right? It's orange, and Irene loves that. I'm sorry. We don't like to refer to you as peach and orange, but I appreciate that. Yeah. Well, that's your hair. Yes, sir. Right. Both good questions. I'm not willing to say that the trigger event of COVID is over, even though we saw a pullback. I think we saw that across the industry. I think everyone's talking about that. By the way, this is subjective opinion, right? I think we're close enough to the ground that we understand this. I think we had a little bit of a fatigued consumer coming out of COVID. I mean, it went from being hard to talk about death to very easy to talk about death to people got tired of talking about death, right? I mean, it was. It happened fairly quickly. I think this summer, I did it personally, just the idea of getting out and getting away, like going back overseas, you know, people I just think kinda unplugged and left. It was. We started to hear people aren't keeping their appointments like they were. People are unavailable. I just think that there was some consumer fatigue. I don't believe that the ability or the trigger event is gone. I think that people will still respond to when we set up, you know, conferences or meetings or abilities for the sales reps to. Well, I lost the word. Get lunch and yeah, things like that. I think people will be receptive to those. I just think that we had a little bit of a dip. The problem that we personally experienced is, and I think I tried to take responsibility for this. When it was during COVID, they were coming to us. Prior to COVID, we were going and getting it. It was hard to do, right? You can ask Matt questions on this. Sales were difficult. During COVID, they were coming to us. When COVID ended, I think we were sitting on our hinds a little bit and waiting for them to come to us, and we needed to go back and knock on doors again. We're knocking on doors again, right? I don't think that the trigger event is over. I could be proven to be wrong. That's subjective belief, but I think it'll be a long time before anybody forgets about COVID, right? I think that opens the door. Are we starting to see low and middle income people back away from pre-need? Too early to tell, but I expect it. We've seen that movie before. Again, you've heard me say that. We saw it in 2008. Jay, Matt and I were in a room talking about it in 2008. What was it last week? I said, "Let's get the playbook out again. We've seen this before. What are we gonna do?" I think lower to lower middle income folks are definitely gonna pull back if they have a choice between heating their houses, paying for gas, paying for their car. That's obvious. It does not impact the middle income and above, right? These things tend to be, or pre-need seems to not be impacted by that. So yeah, we're gonna see some of that on the low. I would expect to see some of that on the low side. I'm not using that as an excuse of why our sales numbers were not where they needed to be in the second quarter. I think it was more of an execution problem than a consumer problem. That's hard to say. It'd be a lot easier to stand up in front of you and say, I think it's a consumer problem, but I think we could have executed better. Y'all pipe up if you want to. Yes. I got questions now. Who wants to go? Oh, good. Mike, so I don't have to repeat it. Thank you. Can you just talk about the FaCTS integration? First on the operational side, you know, you talked about having a precedent growth. I'm assuming there's some low-hanging fruit there from an operational perspective that you can improve with FaCTS. The second part is on the pricing side. Is there an impact there that you have visibility now on a regional basis, on a rooftop by rooftop basis, where we should expect enhancements to the pricing strategy going forward? Low-hanging fruit. I'll tell you where FaCTS came in very importantly for us recently. We were able to identify that there wasn't anything broken. I know that's, it's not the question you asked, but when I started going, "Okay, what's wrong?" We were able to identify nothing was wrong. I put a very high value on that. Yes, with the visibility that we're going to have on these businesses, it is very easy to identify things that are going on now. I'll give you a perfect example, and Matt's probably gonna pop because he wants to say it. Discounts, right? When someone is discounting now or taking our price and lowering it, we can see it immediately. It also actually, for lack of a better word, sets off an alarm. On a contract by contract basis. As opposed to looking at what's going on in a revenue stream a month later, we're actually able to go, "Wait a minute, what's happening right now, right now in that business?" Real time, very effective. That's one example. Matt, you may have more that you could rattle off. Having that real-time data, like the discounts, large sales, being able to look at contracts and making sure that we're charging appropriately to your price question, right? Because FaCTS is so product driven, we're able to make sure that we're protecting our margins as we're pricing strategically in each one of our markets. I don't know that FaCTS will necessarily help us with your pricing question. I think we're pretty dialed in on that on a location by location basis. What it will help us do, and this is answering the question the second time, is it helps us ensure that the pricing we put in place is being followed. Because you got individuals that are meeting with families in a room, and they ultimately are setting the price of what happens. Sticking with that and not discounting it, things of that nature, we can see that real time. It helps in pricing in a different way than you're asking the question. Yes, Scott. Brad, you mentioned that the consumer has been kind of de-energized by pandemic and fatigue and trying to get back to normal. I'd imagine that's the same similar situation that's happened with your salespeople to an extent, that they wanna return to normal life. They wanna relax. Their sales muscles are a little bit weakened from receiving so many inbounds. What do you do to turn that ship around? What does it entail? Employee turnover, does it entail new incentives, new compensation structures, or just old-fashioned beat downs? Good question. Yeah. The beatings will continue until morale improves. No. On the sales side, the compensation is based on. I just lost the word. It's variable. Yeah, help me. It's commission. Commission-based, yes. They're all commission-based employees. The motivation that they have is if they don't sell, their income is very much impacted by what they sell. Well, it's not completely this, but effectively their income is very much impacted by what they sell. You're asking about how they get motivated. Matt and others through the sales team, we can definitely put programs in place. It's like every other sales organization, right? You can put incentives in place. You can put a focus here versus there. We do that. It's a sales force. That's the way we motivate them. I would say that they. I wouldn't say that they were as fatigued. As much as it got easier during COVID. Just really a matter of turning around and saying, looking at the CRM and say, "Where are your meetings? Where were your appointments that you had? How many of you inputted?" It's managing, right? We just needed to manage it a little bit better. I don't think it's to your point of being a little tired, though, and this is where I kinda smile a little bit. I, Brad, could have caused more focus to be placed on things probably in the second quarter. We had had a tough time as a company and an employee base. I wasn't really comfortable. We needed to take a little bit of a break. To the extent that that made it into the earnings, so be it. I wasn't really comfortable turning around and putting the screws on people that I had just asked to work insane number of hours and schedules because we were sending people. Remember, when everyone else was staying home, including in Canada, we were sending 100 employees a night into hospitals, nursing homes, and places where people died and coming back to the businesses. That was not fun to manage for the profession. It wasn't just us. Saying, "Okay, guys, let's go back to work the way I need you to work," was a little less comfortable then than it is now. I have no problem doing it now. I've made it very clear. We're blocking and tackling again. We're focusing. We say we're an operating company. Okay, then let's operate, right? They're hearing that from me now up to and including last week's meeting. I mean, and they're comfortable with that. Yeah, that's always. I mean, that's. We always have to keep our foot on that pedal, but there are plenty of prospects. At-need drives pre-need, right? If we're gonna educate you real quick, if people are coming in and there's at-need deaths and we're selling at-need cemetery, those are hot leads, right? You just sold cemetery space for mom, you're gonna need one for dad, and what about everyone else, right? At-need drives pre-need. That's not an excuse. If at-need is down, then our pre-need sales need to take it up a notch. Prospecting, yes, we have plenty of those. It's more. Matt, would you agree with me? It's more making sure that our sales counselors are actually following up with the prospects they already have. Yeah. It's the blocking and tackling that you talked about earlier. You know, 58,000 families that we served in 2021, 2022, that's three very warm leads per family served at a minimum. It's just doing the blocking and tackling and the referral gathering and so forth. Yeah, I wouldn't wanna do that job, just so we're clear. I'm not being critical that. They're a very important part of our organization. I believe they serve a very high purpose. It is amazing to see a family who comes in to arrange a funeral who has a pre-need versus one that's having to make the decisions right then. Think through that, right? When you have an outline of what the person wanted to begin with, or it's already there and all you have to do is just kinda move through the process, that's a hell of a lot easier in the most difficult day of your life. The folks that are out there selling pre-needs, whether the people they're selling it to know it or not at the time, they're actually making their loved ones' lives a lot easier. That's a hard job, right? You're trying to get someone to talk about their own funeral, talk about where they wanna be laying it, and then pay for it truly when they don't need it because they're breathing, right? It's just a tough job. During the presentation you mentioned you like to own the dirt. Can you walk me through the reasoning for that and whether you would look at a more capital-light model in the future and realize some of the embedded value you have on your balance sheet? Right. In my mind and in the people who join our companies through acquisitions mind, I'm not worried about. I mean, it's almost comical to think I'm worried about next quarter. I know that's frustrating y'all in the room. Newsflash, I'm not. This is a decades long endeavor. If we don't own the dirt the funeral home is sitting on, I mean, these things sit there for 60, 80, 100, 110 years, right? People know where their funeral home is in their community, and they drive there. It's always been there. If I enter into a short-term lease. By short-term, let's say it's a 10-year lease with a 10-year up. You know, I used to think, gosh, 10-year non-competes. Well, I'm around when those are expiring now, right? This industry for those people who haven't owned the dirt, who leased it didn't work out well for them in the long term. If you look back at the history of it just in how it's worked out for others, you wouldn't follow that path. More in my mind, this is the truest long-term thing there is. We're looking at the demographic trends. I mean, our funeral homes are gonna be humming in 2040 and 2050, and I'd like them to be in the same place. Now, if I understood your question is, we own dirt in certain areas that are infinitely more valuable to use as something else other than a funeral home. SCI has been brilliant at that, right? On Kirby in Houston, Texas, down from my house, when they bought Stewart Enterprises, they closed down a funeral home, and I think on top of it now sits a 20-something-story multi-use building, right? It was on a block. I have no idea what they sold that piece of property for, but it was worth more than the funeral home, I can assure you, right? We don't have a lot of that. When we do, we're willing to listen to people's offers. In a larger metropolitan area, we have an entire city block of a funeral home that's doing about 200 calls, and there's a hospital not too far from it. We got a phone call the other day. I'm not so led to that I wouldn't say I would move that and sell the property. We just recently sold some seminary property that and a cemetery that has decades of property available, and they were building. They needed it for housing development on the backside. We sold that. It wasn't a big number, but, I mean, I look at things like that, but that would be one-off. Did that answer your question? Yes. We have to own the dirt, right? Quite frankly, it's also good for our investors because it's defensive too. If something goes wrong, we own the dirt. That's helpful. Yeah. I'd maybe just mention too that, you know, when leasing one of these properties, especially, you know, obviously the funeral homes, moving that property is very difficult, right? We've actually had an example of that very recently where we've had a lease come up, and trying to find a new location for that business, not just for, you know, the family. They know the business, they know the location, all that kind of stuff. You know, finding an actual location that'll have your use without owning it can be difficult in different jurisdictions, so. Guess what we did on the lease that's coming up? We're buying the dirt. I could have started with that example. It just goes to show we should have owned it because it's hard to move. Some people don't like funeral homes and retorts in their neighborhood. Is this helpful for you guys? Are we finding this positive use of our time? Good. I like it. I only ask that before you ask the question because no telling what's coming out of your mouth. Someone mailed it in for me. Yeah. I see you looking at your computer. First, thanks for the highlight of the close-knit deep bench that you guys have at a senior level. It's clearly a differentiating factor. You know, you talked earlier about growing pains and digestion and your meaningful growth over the last few years. Looking forward, how do we avoid this given your aspirations for being considerably larger from here and the need to rely on more and more people who haven't been with y'all for 10-20 years? Right. You referenced the business integration team. But from a bandwidth perspective, how do you think about your human capital asset getting stretched and how you guys have to be ahead of that? What are we doing about that from a full year perspective? No. That's a great question. The very transparent answer is that wasn't being discussed before I became the CEO because the concept, no matter what y'all were being told, wasn't to keep this as a company that was gonna be long term, right? That wasn't the goal. It is the goal now. From the moment that I was put in as the CEO, the first thing Jay and I did was figure out who our backup was immediately, right? Because this company is too big to rely on two people. You're seeing it's in the room with you, right? We're doing that at all levels. We have, and the board required that of us. You know, our new Chair, Deb, before she was the chair, we were working on succession planning and what that looked like at the committee, the HRCC committee level. That's kind of at a high level. We're just doing that. We're adding as quickly as we can to that bench strength. I think the executive team that we have in place now, given who they are, given bluntly, their respective ages and their retirement horizons, we could run a company ten times this size with that executive group, as long as we're building that bench beneath us, and we are. Why did it catch us? Because it wasn't being done before, and we're hyper-focused on it now. I think if something happened to me, today, that this company would be just fine, and I don't think that was the case two and a half years ago. That's not arrogance. That's just there wasn't anybody to fill the hole, right? I think we've done a good job at that. To specifically answer your question, we're focused on that as a management team, and I won't be caught off guard twice. The part two we've kind of talked to it through evolving for the future is automation, right? That will start to take pressure off the current staff that we do have managing these businesses, right? Like, that's where the world's going through automation to get more efficiencies out of their people, right? We're doing the same with FaCTS, integrating that with our CRM, our GL, other you know our payroll processes and systems, you know, to start getting more out of the people that we do have. That's kind of the second part to it as well. You know, it's also about finding the right people as you grow and putting the right people in those seats. You know, we hired an extremely capable CFO two years ago. Oh, geez, I can't even believe that you introduced him. You know, somebody. Take the mic from him. Within his first year, you know, I feel like, you know, I've fit in pretty well with the group and been able to come up to speed really quickly. Again, somebody who hasn't been in the death care space my entire life, right? Spent 15 years in real estate prior to this. Finding the right people and putting them in the right spots can also, you know, alleviate some of those pressures. Yeah, I hate to admit it, but I mean, this is a close group, and he was one of the ones that wasn't in it, and we are an infinitely better company with him added, and it drives me crazy because he's a ginger from Canada. Anyway, it's still good to have him. I mean, it truly is an important part of our team. Then, you know, I turned around and I looked at Jennifer two, three years ago, and I said, "You can do this." She was resistant to it because if you're a lawyer and you're a litigator and you turned yourself into a corporate lawyer, you think, "Well, how in the world am I gonna? I like, I don't even understand the financials." I said, "Well, that's easy." She—we literally started by going through the financials, right? Then you do investor trips, and then you go on, acquisition trips, and then before you know it, you're sitting down at the end of the table helping with the acquisitions, right? We're doing a lot of that. I'm very comfortable. If you'd asked me this question the beginning of 2020, I would have said we're in a precarious position. We are not now. I mean, literally, if something happened to both Jay and I, this company would be just fine, and that was just not the case. Whoever's next. There you go. Yes, sir. I like your socks. Appreciate it. The anecdote you talked about recently, losing the acquisition to a high bid from private equity, are you noticing an increase in frequency of that? I ask that in the context of, you know, maybe had you acquired it would have likely been a very low return, which is why you passed on it. How do you think about that in the context of the NCIB that you announced? Do you sort of trade one off versus the other? Is that something you're thinking about more, maybe relative to three months ago given the stock price? All good questions. We tell everyone the businesses we buy are gonna state 10 IRR. Say that forever. When we don't buy something in that range, we disclose that, obviously. Horan, Bowie, the businesses you'll see today, those were outside of that range. This one would have been as well. The benefits we get after we've operated those for a few years, as well as the intangibles just by adding them to our organization and having other people come, are well worth it, right? Sometimes you will pay up for those larger businesses, and it's almost always because of their size. Yeah, our IRR might've been a little less than what we were looking for at the time, so far, we're 100% on taking those businesses and making them better. That multiple drops down pretty quick. We can't promise that. We're not gonna say we're gonna do it every time because we're not. I mean, eventually we'll catch one. Do I look at that in terms of the NCIB today? No. There's a practical reason, and then there's just the math reason. The practical reason is we went out and raised equity at the end of last year, and I'm pretty sure it'd be hard for people to take if we turned around and started using that equity to buy our stock back. Now we have. We have already done that on a smaller scale. Not a big number, but we did that when the stock went below CAD 25 a share, and I think it still is, but we have other uses for that, and Dan can get into that more. If we buy stock, we can then use it. Compensation, restricted stock units, things of that nature. There's a secondary use for it. It's basically a different use of cash. Am I at a point now that, I would turn around and use the capital we have to start buying our stock back? No, but we're getting close to agitation level for sure, right? I mean, we're not a CAD 24.5 stock, but I look at the rest of the world and everyone's having that pain. I think what we do is we just keep doing what we do. You know, the funny part about it to me, and this is why I start showing the fact that I'm really wasn't born to be a publicly traded CEO, is the disconnect between the stock price and the performance of the company is mind-boggling to me. Like what, we're worth half of what we were worth a year ago? No. I mean, something's gonna change. Yeah, we had a quarter that was funny, and that has nothing to do with the macroeconomic things that are going on. Sometimes it's frustrating for me to see the stock price that low. When it gets to that point, I have to pick up the phone and call Dan or I'll call Steve or someone, and they remind me that it really doesn't matter today. Are we gonna raise capital today? No. Are you planning on selling your personal stock today? No. I'm sure it's frustrating for people in this room, but it really doesn't impact the fact that we're going out and doing acquisitions because we still have access to capital. Now, if we wake up in 2024 and, you know, our stock is still where it is and we need more capital to continue growing, that might be a pain point for us. I think we've indicated that we're willing to take on the debt if we're able to buy these businesses, they cash flow like they do, and we can service that debt. Not necessarily what I wanna do, but we could. No, I'm not really interested in buying our stock back, not at this level. Would you add to that? No. I would. I maybe supplement it by saying. Yeah, we have. We've executed a little bit on our NCIB, as you mentioned, and you know, I would prefer just as well as you would to put the money into more acquisitions, but the math, you know, the math is just the math in our mind. You know, we don't believe the valuation is anywhere near appropriate. We're gonna capitalize on that upside just like a lot of you in the room probably will as well. Mr. Zach? Since we're talking about valuations getting crushed, maybe we could. I believe I looked at the stock today 'cause I'm sure I'm almost positive that if I'm giving an Investor Day, our stock has dropped because that's what God would do to me. Anyway. Okay. Well, that answers my question. So that's why my phone is over there upside down today. Maybe you could walk us through the puts and takes in the trust and pre-need. When interest rates are on the rise, the capital's going down. At the end of the day, what does that do to your maintenance coverage? Jody, would you give the mic back to Dan? Yeah. Zach, it's, you know, the trusts are run like any other funds are kind of run, right? As interest rates go up, that maybe gives us a little bit of opportunity on our care and maintenance side, as we reposition some of those investments at higher yields. If you recall those investments, you know, we receive the income. It's primarily dividends and interests in those funds. Maybe there's a little bit of opportunity there. Obviously in our existing, you know, our existing assets in debt, you know, it's having fair value impacts. Same thing on the pre-need side. You know, as the market gets hit, it's a lot more equities. You know, valuations are going down. You'll see the fair value in our disclosure in our financial statements as the market gets impacted. On that side, you know, we get the income as contracts mature. We estimate those contracts mature. Let's call it 4%-8% of those trusts in any given year. You know, yes, of the 4%-8%, are they gonna be impacted 'cause we're taking out the fair value of those investments at that time? Yes. You know, we invest both of those funds for the long term as that's the investment thesis. That's when, you know, contracts will ultimately mature. You know, interest will come back, and we'll defer maintenance costs in our cemeteries for the care and maintenance trust. We manage through that. You know, we look to reposition the assets into obviously more inflation hedged investments. You know, hard assets, you know, is a good example. We look to manage that. We've got professional portfolio managers who are also managing, you know, the funds that we're invested in, and you know, we work through it. Short-term pain. Everyone have to die on the same day for it to really impact us right now, right? I mean, it's just short. I think, well, we all hope it's short-term pain, right? Everyone in this room probably. Good question. Yes, ma'am. Do you get to ask, too? Is that the way this works? I didn't put a rule in place, did I? I thought I already came over and said that. Of course, you did. Just talking about the whole M&A thing. Mm-hmm. Certainly everybody in your industry has had a really rough couple of years, and I think I'll speak for myself. I would have expected more of an acceleration in the M&A pipeline and in the discussions. Can you just talk a little bit about what's going on? Or is it a case of I can't even think, I'm so tired, I can't think about that, come talk to me next year once I've had an opportunity to breathe? No, no. I think there's an acceleration. I've seen an increase in the brokered transactions. I've seen an increase in people who called us. I think valuations, people are seeing values in their mind take up a bit with a couple of these private equity firms that were doing what they were doing towards the end of the year. Remember with the performance of some of these funeral homes and cemeteries in 2020 and 2021. I'm sure they looked a lot different than they do now. If you're not thinking about it for the long term or you don't really know what you're buying, it could look really sexy, and I'm not sure it looks as sexy anymore today. I wouldn't expect the inflow of some of the money to come in like it has in the past. No, I've seen an uptick. What you have to be cautious of is you see what we've bought this year. Just because of what we bought this year doesn't mean that there isn't activity out there, and it doesn't mean that we're not active. For the one that I talked about, I had moved some things around expecting that to come in the door, and it didn't. I moved some other things around, and that puts us off 30 or 60 days. I don't look at that number on an annual basis. I don't try to kill everyone at the end of the year to get acquisitions in. We said 75-125, and if I do 50 one year, it's because it needed to be 50 that year because that's what we're doing in the long term. Just like if I do 250 one year, I'm not gonna spike the ball and tell you guys how great I am. It's just, it's a goal as we kind of make these acquisitions. Activity is up. Just because activity is up doesn't mean it's businesses that we want to buy. I saw private equity really get aggressive towards the end of last year and beginning of this year, and I think it's gonna stop. I'll give you a perfect example. This will touch on a couple things. We went and saw the business that the Ferris family, the people that we bought just north of Virginia, we saw them the night before we got here. Too close not to go see them. Probably put a little bit more stress on the team than we needed to, 'cause it was a late night and an early morning, but we just wanted to go see those guys. They were offered 25% more than we paid for them by a private equity group. And they said no, and that's millions of dollars, folks. And they just said, "You know, we're not doing that." 'Cause they realized what it meant, right? Okay, they buy it. They realize they can't cash flow the way that they said they were going to. They come in and they fire half their employees, they blow up their business. I can point 10 examples of that that's happened and get them on the phone with people it's happened to. They will tell him it's the worst decision they've ever made. Very easy to defend against that, right? It doesn't always work, though. Sometimes people just want the money and walk away, and sometimes it's people that really surprise you. You would think that they would be like a John Horan or a Lisa Baue or a Pam, the people we're gonna meet today, and when it comes down to it, they'll say all the right things, and then they just want the check. Okay, well then fine, they can. Someone else can own them. They don't need to be part of our little exclusive group. I do see activity picking up. That answer your question? Just with respect to the bulk sales, the mix through COVID versus 2019 and then versus today, did you see an explosion in bulk sales activity? No. It's the bulk sales activity is really limited to two different groups, right? It's either an ethnic group or it's a group built around a religion. They're kinda limited to three or four groups, right? They're limited to three or four groups in a few of our large cemeteries. It's the way associations buy or it's the way a mosque would buy or something along those lines, right? Because the particular religion wants an entire section that's just that religion. That might sound weird in 2022, but it's very accepted and people do it, right? I mean, the two groups, just to further, you know, throw a social issue out there, it's Jewish and Muslim, right? They get along all the time, and then we get this situation where they're the ones that are buying groups of cemetery property that they want to be exclusive to them. Similar with other groups, Greek Orthodox with the upright mausoleums. Then there are in our New Jersey cemeteries, we have Chinese associations that like to buy groups of properties and then offer it for sale within their organization. That wasn't affected by COVID one way or the other. You know, I can't. It's not up to me to speak to whether or not that should be going on or shouldn't be going on, but that's the demand that we have in our different groups. I didn't see that being affected by COVID at all. Maybe I can steal one more here. Of course. The organic opportunities you have in terms of building funeral homes in combo properties, how do you think about that in terms of the NCIB M&A versus organic? What level or what percentage of your portfolio has opportunities for that today? Good question. We have as many opportunities to build combos as we want to do at any given point in time. Again, we're not like some of the other companies that would have a construction department whose job it is to run around and build combos. I believe if you do that, you have people creating a job, and that would send you building stuff which you don't necessarily need. Our VPs of ops work with our corporate development people, and that's who build these combos or build on-sites on buildings. We bought a piece of property in Mississippi that's primed for a combo. We're gonna close on one, hopefully by the end of the year, that would be perfect for a combo. As a matter of fact, that's the one we were talking about this morning on on-site. We'll have one or two going at any given point in time. We have one going on in Waco, Texas, right now. Most of our cemeteries in our portfolio, by number are too small for a combo, and some of them are in markets we're not allowed to do it. Michigan, for example, we own 28 cemeteries there. You know, about 28 cemeteries, and you can't have combos in that state. And if we could, we would. Trust me. Completely, but we can't. Yeah, we would build it. I would say you'll see us having one or two. They're very accretive, right? I mean, we just basically put a business on top of land we already own, and sharing a cost structure. Dan wants to say something. Yeah. I was just gonna add, I think we've identified, you know, a handful of opportunities. But I think the other part, as Brad alluded to, that's really important is as we go out and continue to acquire businesses, we're also identifying additional opportunities. You know, to your kind of financial point, it's extremely accretive, right? Because that's not built into the acquisition. That's pure upside, pure gravy. You know, they really add to the business. In some particular instances, they add to the story and where the seller or the owner really sees the opportunity along with us for an on-site or something or some sort of development, may not have the capital, may not wanna, you know, take on the debt that would be required to do that and along with the risk. As we talk to these people and have those conversations, it's another great point to bring along with the Park Lawn story, and they really can latch onto it at times. I don't know how much time you've spent in funeral homes and cemeteries. We obviously do it a lot, but today you'll get a good example of that. You'll go to a standalone funeral home that has one of our central care facilities and also one of our retorts that is there. Then you'll go to a combo, right, where a funeral home is sitting on a beautiful cemetery with a reception center. Both of them are very nice buildings. Both of them you would go to. You will understand the combo impact because it's 10 minutes from downtown Nashville and Rolling Hills, and you'll get it, right? You'll understand very quickly. You'll see it and feel it as a consumer, right? They're just more powerful. Look, SCI being as successful as they are, I mean, they've got combos all across the country that are just gorgeous and mind-boggling. They figured that out 60 years ago, right? It's the way to do it. If we look at the CDC data on the amount of deaths that occurred pre-COVID and during COVID and where we are now, obviously, we had a lot of excess deaths in 2020 and 2021. If you look at the projections for the next 2-4 years, the CDC is projecting that we won't get back to the pre-COVID death rate until, say, 2025. Are you in agreement with that? No, but for a different reason. How in the world can anyone predict that? I'll just start there. I mean, I don't agree with it from the standpoint of how do they know, right? I mean, they don't have the best track record in the world the last two years anyway. I would say, here's what I know. I cannot control the death rate, but there are things we can control. If the death rate continues to be where it is, then we're going to have to pay even closer attention to our cost, and that might involve more pain than I'm willing to enter into right now. You don't go in. I'll leave that for other companies to go in and make a rash decision a quarter after it goes down, and their results will reflect that in the long term, right? I just ask these people to do certain things. Now, if it continues, then we're gonna have to manage our costs to that, right? As independents would. I'm not gonna knee-jerk to that in a quarter. If I still owned it myself and Jay and I were still making the decisions, we make exactly what we're doing today, and that's the way we put a pin in it. I do not believe the CDC has any idea what the death rate is gonna look like for the next 12, 14, 18 months, but we will have to manage to that. If it continues to be where it is, we're gonna have to make more difficult decisions. That's our job. We'll be independents out there. That make sense? I'd like to get a little more data before I make decisions that it's hard for me to recover from. I've got employees that worked with us for decades. It's hard to replace an employee that's worked for you decades if you make a decision based on 90 days of data. That's why we're a good long-term investment play. If you're trying to figure it out, I know you guys aren't, but if people are trying to figure out on a quarter-by-quarter basis, I think they're going to be about as accurate as the CDC is. Kind of following on that point of data, day-to-day is obviously extremely valuable. You guys are really making a push into that space. How do you balance. You know, you've referenced many times on the call, you have to run these businesses for years, not quarters. Right. How do you balance having real-time data, being able to react to real-time data, which often can head off problems, but also from a cultural standpoint, making sure people are still running their business for the longer-term health and not just trying to meet their numbers this month because they know they might have somebody coming down their lane that they might not have in the past? Right. That's a very good question. I think that's where this management team comes in, right? You got location management and the people that are running their business, and we ask them to run it with an ownership mentality. They're not gonna always get it right, which is why Matt sits there with the VPs of Ops and the directors of operations, you know, as kind of a bumper for them. I think to answer your specific question, FaCTS is going to give us an ability to tweak it, to tweak businesses to a level that doesn't impact us for the long term, but probably pushes them, pushes these location managers a little harder than they would without the data, right? I think it just allows us to be more precise, a scalpel instead of machete. That makes a difference, right? I think we're gonna be able to do that. I don't think this would be as sexy of an investment for anybody in this room if the data didn't show what was ultimately coming, right? Which is the death rate, the over 75, the US population. That is inevitable, right? As we continue to make these acquisitions, it could be 2023, it could be 2024, it could be next month that it starts, right? When it does, it's gonna be that way for a couple of decades. I think we continue buying businesses, we continue growing, but we've got to manage those businesses to the death rate that exists today. FaCTS is gonna let us do that. If it gets to a point that we can't get the margins we need, then we're gonna have to make harder decisions. I just want enough time to pass before I make those decisions because they're harder to pull back from. Does that make sense? There were companies that in the beginning of the pandemic started laying people off and furloughing people. I mean, because everyone thought that we were gonna get hit in the averages, and that was the exact opposite of what happened, and they went and tried to get those people, and the problem with that is they were working for us already. I don't wanna make that mistake. Scott, did you have something? Yeah. Back to the acquisitions issue. Are you starting to see acquisition values being based on 2022 results, or would you expect that to happen? I imagine that all the deals that are being marketed or looking to get done are being based on 2021 numbers. pre-COVID, we were basically looking at anywhere between a 5- to 10-year average at a growth rate. That's a little bit. If it were formulaic, everyone would do it, right? There's a little bit of subjectivity that goes in there. We basically looked at what the business looked like over a 5-year period, sometimes a 10-year period, because inevitably, all independent owners would tell you this, you'd have one year that was a blowout year and one year that kinda wasn't in a, let's call it a 6-year period. It just because the market or what was going on, and the death rate or something, you'd just have this. Over time, it should be roughly the same. Post-COVID, no one with a straight face is trying to pretend that we're gonna base the valuation of their businesses off of 2020 and 2021 death data. No one. I mean, they try it, and then I look at them and say, "Really?" They smile, and then we move on. Same thing's gonna happen with 2022. No more than we're gonna pay them off of the inflated rates of 2021 are we gonna should you expect dollars to go down because 2022 has a lower death rate, unless it persists, because then it becomes part of the average, right? I don't think anybody in our profession believes that what's going on with the death rate right now is going to last as long as the CDC does. Now, we could all be proved wrong. No one thinks that. I think everyone will tell you that they expect it to normalize because we're talking about the death rate. It's always normalizing, right? It kind of clicks along. When we saw the numbers come in for the second quarter, both Jay and I thought there was something wrong in the numbers. We didn't think it was. What? That can't happen like that, right? It's just not used to seeing the death rate drop like that. We talked about that with Dan. Matter of fact, we challenged Dan pretty hard on what those look like. That's how out of the norm it is. Anyway, back to your question. No. Now, if the death rate stays where it is for 2022, 2023, then yeah, I think you're gonna start seeing people bake that into the numbers. I don't believe that's going to happen, so I'm not doing that today. You're not talking about, I mean, it's capital, and it matters what we pay for things, but we're not talking about big swings one way or the other, right? If you're talking about a 350 call business, so you're modeling it at 340 or 360 calls. You're not talking about modeling it at 300 or 400. Incrementally, it's not as big of a deal as it might sound. Even in these big businesses, where you're talking about $10-$20 million worth of revenue, yeah, okay, now a half percent matters a lot, so we're being much more specific about that. Generally what we do, fluctuation from year to year isn't gonna matter that much. I'm not being flippant about it. I understand it's still money. Correct. Certainly since joining Park Lawn, and I would argue since being at Signature, we haven't made a mistake yet. We will. Not promising y'all we won't, but we've been able to improve everything we've bought. That's the whole point of it, right? What we've been able to make them better. Sometimes it happens out of the box and we look like rock stars. Sometimes it takes a year or two to make it happen. We've made all of our businesses better pretty much across the board. Would you agree, Matt? Yeah. All right. I think we're gonna wanna give some people some time. We've got a full day today and a full evening. That was almost two hours. That was almost two hours. Wow, I'm peaced. I'm out. Thank you everybody for your time this morning. We really appreciate it. We'll give you a couple minutes to get back to your room, check your emails, all that kind of stuff. We've got lunch this afternoon, so thank you, everyone. Yeah, I think. Hold on just a second. I think everyone's going. I don't think I heard anyone say they weren't going. If you get back to your room and you have an emergency or emails, do not make the mistake of not going this afternoon. This was the worst part of your day, all right. Dealing with me. It gets nothing but better from here because you're gonna hear from some real human beings, and you're gonna go back who we really bought their businesses from and some real people who work in them, and you're gonna get a viewpoint into our company that is infinitely better than I can give you sitting in this hotel room. You're gonna have to answer to me if you disappear. I wanna see everybody on the bus. Yes. I would not take your electronics. I think what they're gonna say to you. Presentations? No, there will be. I have given them time slots to talk to you. I can't imagine it's anything that you would wanna take your computer for. Yeah, Jennifer, you'd agree with that? No, I think it's more, observe and learn. Anything else? What time are we doing? Yeah. We're gonna be 11:50 at the bus or in the lobby. In the lobby by the clock. Okay, there you go. Eleven fifty, and we'll go get some lunch. Thank you, guys. Thank you.