Are we ready? Did you all think this was the AI breakout or something? Look at all these faces. This is- You're in the wrong place. Yeah, this is Service Corp, just so we're clear. Okay, nothing that exciting. So I do this every year because I need new material, but Service Corp, I'm kinda making this up, but that has come to every single Raymond James conference. So before a lot of you were born, they've been coming to our conference. And Eric, this is probably your 20th? No. At least? Yeah, 25. Yeah. So, we're always happy to welcome back Service Corp, the world's largest funeral home company. Like, 12% share in the United States. So we're just gonna kinda do a Eric, Eric didn't wanna do any slides. He made me do all the work. That's fine. So we're gonna we're just gonna have a nice... We'll leave some time at the end for questions from this back room. So the first question is, can you just kinda take us through the whole COVID journey, your earnings piece? You're on the back end of weakening COVID, the funeral demand was spilled over to cemeteries. Just kinda, if we use the baseball analogy, where do we think we are in terms of normalizing that trend, and from where we started? Perfect. Perfect. Thanks, John. Thanks for having us again. For those of you all that are new in the room, largest owner of funeral homes and cemeteries in the world, 1,500 funeral homes. Didn't I just say that? I don't know. Did you? Yeah, I did. Okay, that's all. 1,500 funeral homes, 500 cemeteries. You did say 12% market share, which is the funeral market share. The cemetery market share is about 28%-30% from a revenue perspective. Baby Boomers have already started to affect, in a positive way, our preneed cemetery property sales, which has driven a good amount of growth for us over the past five plus years, and a baby boomer, you know, demographic effect that's gonna positively affect this industry and our company coming in the, in the future. You're right, though, that we've had quite the movement in terms of COVID from our particular industry. Pre-COVID, we were about $1.90 per share. I think we went to $2.90, then up to $4.80, and then we came back down the other side of it from that $4.60, I think it was, down to about $3.80 to about $3.47 last year. And I think to answer your question, we're kind of on the back half of that now, because we think we've kinda hit the trough, and we expect to grow from about $3.45 to about $3.65 is the midpoint of our guidance. Not the 8%-12% growth of bottom line earnings per share that we've been able to produce over a long period of time, but about half that, as we still have some hangover effect from the COVID effect. We performed about an extra 120 to 130 thousand funerals during COVID over a kind of a two-year period. Obviously, that got pulled forward from 2023, 2024, 2025, and 2026. After 2026, it gets pretty material. To show that we've kinda leveled out, last year, we did about 350,000 funeral services. I think this year we'll do about the same, about 350,000 funeral services. What's happening is you have a natural population growth, well, with an M&A program that is positive, but being kinda washed by a little bit of the tail end of this COVID effect, of this pull-forward effect that I just described to you. I think moving forward into next year, into 2025, I do think you're gonna start seeing some positive trends come back in funeral volumes, which will affect the entire company, including the cemetery segment as well. We went through the peak, we're coming down, we're in the later innings, we're flattening out, and I think you'll start seeing us grow during 2024, but not to the 8%-12% level, kinda mid-single digit percentage levels. I do think that's near time on the horizon in 2025 and beyond. Just to be clear, if you took the $1.90 and annualized it, your earnings are still running above kind of a 10% compounded baseline. So you found some earnings, took advantage of COVID and found some earnings. So maybe kind of talk about that. Yeah, I think, you know, we learned a lot during COVID. Some of the positive things we learned is that when you have an acute event, is your associate base, your employee base, large enough to do it? Or if you have to add a lot of costs there, can the facilities handle it? And, you know, we were very pleasantly surprised. When these funeral homes were built in the 1970s, 1980s, and 1960s, probably in some cases, they're really quite large. You know, something that needs to be 7,000 sq ft is probably 15,000 sq ft just because of the way it was built many decades ago. And so we did not have any type of physical capacity issue during COVID when we were serving an extra 125,000 families. The truth to it is, because it kinda came in pockets, we're able to move our associates around by using our national scale and really didn't add any labor costs as well. So our expectations are, as there's more throughput going forward, as the baby boomer generation naturally affects this industry in terms of throughput in a positive way, that we're not gonna have to add capital in terms of the facilities. And I think we could probably handle it with the labor we have, if not, at least maybe adding some, you know, small part-time labor. But when the high fixed cost business that this is, which is a 70%-80% fixed cost business, what we're looking forward to are very high incremental margin business coming in through the additional throughput. We expect to see, you know, margin expansion over a period of time as the Baby Boomers affect this particular industry into the future. ... So, you, Sherlock Holmes fans will remember the famous dog that didn't bark. That's how he solved the crime. You can look that up. So English major. So, you know, I'm always kind of fascinated by the dogs that we think are gonna bark, that don't bark. And one of those was, you know, years ago, it became clear that if you wanted to, you could buy your casket at Costco or something, and have it shipped to the funeral home. That never really happened, and you still are in good casket margins, although this is the declining part of the business. Why do you think that is? Well, I think we adjusted prices in a way that, you know, took the casket down to those type of pricing levels, and so there's really not really a pricing arbitrage there for doing that, much less the fact of the headache of handling that and getting that to your particular funeral home as a family. I mean, the truth to it is, in the at-need environment, the families need one thing: They need help, and we are very well trained as an industry, and particularly our company as well, to immediately step in and to handle that family's loved one in a compassionate and respectful way. And then, what they really need at that point is just guidance. Once they kind of figure it out, there's like this natural progression to say, "These people are doing a great service for me 'cause I haven't been through this, and if I have, it's been maybe one other time in my life at max." It just kind of gives its own trust, relationship develops, and then that develops into, you know, what are the offerings that I could do? Now, there, there's plenty of, you know, good, better, best caskets that are out there that they could select, and they certainly have a right to do something different and bring a casket into one of our funeral homes. I just think it's just the trust that we're able to establish very, very early on in the touchpoint with that particular grieving family. I think that just kind of carries on through the process, John, over the next three to four days in this hypothetical event, and that lend itself to just not really being a disruptor. And, you know, I don't think there's really much of a price differential anyway in the first place. Yes. There could have been 20 years ago. Right. We had to go in as a management team. We're a management team since 2002, as executive management, we had to go in and kinda tweak the service versus merchandise type of mix in terms of where our pricing was, but I think that was an issue that was, you know, 15, 20 years ago. So people who wanna shoot at your stock, you know, point to some pricing surveys, and they point to the FTC transparency rule. So this is kind of a big, fat pitch. You've swatted it, a couple times pretty well, I think. But for people who haven't heard, you talk about that, maybe, if you could bring us up to speed on your latest and greatest there. So let me talk about pricing in the market for our company, and then I'll come back to the- Sure ... to the FTC as the second part of the equation. So when you think of our market, we're very tiered. Since we're sitting in a Ritz across where I'm sure John stays at a suite and the rest of us- At the Hampton Inn in Atlanta. I don't believe that. But since we're sitting in a JW Marriott Ritz facility, I'll use that as the analogy. You know, we're playing in the Ritz-Carlton, the upper end, we're playing in the JW Marriott, kind of the upper middle. We're playing in the Marriott, kind of the middle. We're really not playing in the price points much beneath that until you get to a very low end part of our industry, which is kind of a commodity, asset light, direct cremation model, which we have about $300 million of production a year for that particular model. And so when you go into one of our markets and you say: I wanna take this particular home for Service Corp, which analogizes to the Ritz, and you compare it to something else downstream in terms of the pricing tiers, yes, you're gonna see a difference in those particular situations. But what you're not gonna see, market by market, location by location, is us disconnected with the true competition that we have with each tier in each market. So if there is a high-end independent in a market, and there's our high-end location, the prices are gonna be very comparable, and as you go down, tiers are gonna be the same. If that wasn't the case, then I'd think you'd see some leakage in market share as opposed to kind of the modest growth in market share that we've been able to have and maintain over a, over a period of years. Second part of the equation is the Federal Trade Commission. So for those of y'all, I'll give a little bit of background here. The Federal Trade Commission instituted what was called a Funeral Rule, 30-40 years ago, I guess. It was a positive step in our industry, frankly. I think the Federal Trade Commission did a good job with this rule. I think we're in favor of this rule, and I think they've done a good job, frankly, you know, evaluating the rule as we've gone, as we've gone through time. I think we view them more as a partner in these situations to make sure that the industry is held to a high standard, which is important to our culture, for our company, and frankly, the culture of the industry as well. So going to the specific question that's more real time, is about every 10 years, the Federal Trade Commission has to open up the rule and take a look at it, so to speak, and they've done that. There was some type of consumer advocacy brought into the equation at some point in time, relating to: Does there need to be more pricing transparency, and does there need to be, for example, pricing online or what is called our GPLs, or our General Price Lis t, placed online? To step back and say: How do we feel about that? Well, we think in some cases it's very strategically important. In fact, of our 1,500 funeral homes, we have about 1,000-1,100 of those funeral homes that have pricing online and GPLs online as we sit here today. Ultimately, I think we'll work through the tiering, and we'll get to the full amount, regardless of what's happening with the Federal Trade Commission. But I think that's gonna be maybe the big push to hit, and I think when people originally heard that, there was a little bit of a knee-jerk reaction that this business is really a commoditized, price-sensitive business, and it really isn't. It's a service component that's based on the compassion that the industry presents and the solutions that the industry presents in real time when a family is at a very, you know, difficult point on a particular day of a particular week. And so I don't—whatever happens where the Federal Trade Commission rules and puts out the new rule or revision of the existing rule, I don't think there's gonna be anything out there that we're not aware of or anything that we think is going to affect our business one way or the other. When we have tested this, to put the GPLs online and put pricing online, we did it from a strategic perspective, from a digital marketing perspective, and we're always trying to tweak it among these tiers and get it right. As John knows, it takes us a while to get things right, but we're trying, and at the same time, I think what you're seeing is not an effect on our business at a particular location in a particular market. If anything, there may be a slight positive effect, kind of prearranged funerals in that particular market that has some of the new pricing dynamics that we're testing and putting online. But for the most part, this is not gonna be a material event to our company or the industry, in my opinion. And again, we're supportive of this particular regulation. I think the FTC has done a good job with the industry over a period of years. That's very diplomatic. One more on a couple more on funeral, then we'll switch to cemetery. Roughly, it's about a 50/50 split almost between funerals, so we're gonna divide our time equally. If you were doing 100 funerals 10 years ago and 100 funerals today, what% of those are, you know, the services being held at the funeral home versus today, you're doing it celebration of life in some third-party location? What's what kind of economics do you bleed when you have to chase the funeral into the country club or to the- Yeah ... you know, scattering the ashes over the Pacific and burying the Harley or something? I'm thinking of a classic baby boomer sort of vanity funeral, but, how does that work for you? Well, it's, it's interesting. It's a great question because- Thank you. It could be quite different from an answer than what I'm gonna give you, that we just don't see a material effect in these situations. There's no doubt that there is a trend where someone's gonna do something in a park or at a beach or the Harley-Davidson, whatever you just mentioned. But what we find is, in the immediate event that they are utilizing our facilities to get an immediate closure, they are doing a celebration of life with us at our particular facilities, and what we're finding is then they're doing more of a secondary event. Mm. You know, over the summer, where the families can kind of coordinate, for example, in this hypothetical, to everyone can get their calendars together and meet at the beach and have kind of a secondary event. We're really not seeing it, you know, leak into the amount of celebrations that we have are decreasing, and that's, that's the cause of it. The one piece that we are, as you know, have seen, is an increase in the cremation rate, and the cremation rate will be growing 100-125 basis points per year, so you're looking at 1,000 basis points in your 10-year example. That cremation consumer is doing two things: They're generally spending, you know, probably about 50%-60% of the traditional funeral. So you do have a little bit of a headwind in your EBITDA every year as that moves 100-125 basis points. But at the same time, what we've seen over the past four to five years, or even six to seven years, 'cause I don't want to say that COVID's the cause of this, but we're seeing the cremation consumer say something very clearly to the industry: "Hey, just 'cause I don't wanna go get interred into a cemetery, doesn't mean I don't want to celebrate the life of my loved one." And we really had to pivot as an industry and as a company about 10 years ago and really embrace that. It is not unusual at all when you walk into one of our funeral homes, that there's gonna be a celebration of life in one of our good, better, best event centers. When you walk in, you know, maybe half of them are cremation and half of them are, are traditional as, as well, and it's something that's continuing to be a trend. I also think, to take that one step further, which I think that strategically we are starting to focus on more and better, is how do you get that then cremation consumer into the cemetery differentially? They are going into the cemetery today. You know, we have cremation gardens, and we have cremation products, such as mausoleum niches and stuff. There's new products called glass-front niches, where you have an urn and keepsakes and pictures and things along those lines that are getting more and more popular. But I think that is an organic growth play that we hope to get better in the near term, in the next few years, about getting more of those cremation consumers into our cemeteries. I think we're kind of excited about that. Great. So good segue into cemetery. Qingming is a big holiday for you guys. You had some weather last year, so, let's talk about this year versus last year. What's going on with that? Yeah, the weather last year that John was talking about was first quarter last year, and everyone's right about, you know, what occurred on the West Coast, and we're heavy on the West Coast. I mean, if you take the West Coast, 70%, at least, of our cemetery production is gonna be generally towards the West Coast, and a significant amount is gonna be in California itself. And you've certainly heard some of the same weather, you know, about it this year, but last year was unique. I mean, if you have weather this year, okay, it's raining, et cetera, et cetera, in L.A., unusual. People don't really travel around L.A. when it's raining, believe it or not. But ultimately, you know, that's gonna cost you two to three days, three to four days, and that sale's not going away. That sale's gonna be scheduled on Friday instead of where it was scheduled on Monday, in my example. Last year was different. Last year, we had some very significant sizable inventory in some of our parks, particularly our largest park outside of Los Angeles, that was simply washed away. And when you invested capital, you almost got it to a point where it was self-sustainable and wasn't gonna slide down a hill, and that event occurred, and a good amount of that slid down a hill, and a good amount of that started over. So this is a consumer, predominantly in California, that I'm referring to in this particular example, that's dominated by the Asian consumer. The Asian consumer wants to physically be there, sometimes with a feng shui master, and wants to see it, step on it, see what it's like, et cetera, et cetera, and that has to happen before the sale will occur. Well, it couldn't happen in this situation. Then it crossed over a festival called Qingming, as John said, which is somewhat of a material event for our industry, especially with our aging consumer on the West Coast. Well, when that crossed over Qingming, Qingming was kind of done. It's almost like, "Hey, Christmas washed away. Let's do Christmas in February." That's not gonna happen. So we kind of permanently lost those sales at that particular time, and until we could get that inventory up and running again and spend the capital, which we were feverishly doing, and I think that's a lot of the stuff that you, you know, potentially saw as one of the tailwinds that you saw, particularly in the fourth quarter, when preneed cemetery sales were up about 9%. A couple more. The one thing I was hoping you'd say, so I'm gonna give you another at bat here. You know, one of your changes through COVID was to have a leaner, more productive sales force. So maybe talk about the numbers there, number of salespeople, production, et cetera. Yeah, that, that's a great point, John. Pre-COVID, let's call it 2018, 2019-ish, you know, our prearranged funeral and cemetery sales were somewhere in the ballpark of $1.7 -1.8 billion. Today, as we speak, they're in the ballpark of, you know, $2.6- 2.8 billion. But back in 2018, the number of sales counselors that we had were approaching 4,400-4,500 sales counselors. Today, as we speak, there's 3,700 sales counselors. So we're doing, you know, $800 million more than we were back then with, you know, 600-700 less sales counselors. The answer to that clearly has to be technology. A lot of this had to do with customer-facing technology that we utilized, where we are doing sales real-time virtually. So you know, you're, you're coupling it with a Webex or a Zoom presentation, sharing screens, go through it that way. You're also going out to those individuals' homes, like is normal in this particular industry, and you're doing a presentation, but the technology allows it to be done real-time. It's not manual. You're not going back to the office afterwards and spending three to four hours processing a contract, filling it out, maybe driving back to that family's home a couple days later, getting wet signatures. All of this is happening in real time within a tablet-based system. Payment is made, signatures are made, and that allows you to open up a tremendous amount more of productivity of the individual sales counselor. That's the technology that we used at the time, coupled with some back-office technology, which is just your CRM system getting better and better and better. I do think we have a nice runway to go to continue to improve our CRM system that makes the actual appointment that much more valuable and productive as well, and more to come with that. Your partners are Salesforce and DocuSign? Who are some of your technology partners? It is DocuSign, but we've more recently done it in-house instead of using DocuSign. But yes, the CRM system is a Salesforce system, and we continue to use them as a strategic partner. So point being, this isn't exactly leading edge. This is using some fairly established tools, you know, and getting into the 21st century, away from the brochure and the sitting in the living room. Right. It's a good way to say it. Thank you. Yeah. Just having a little fun with you. You have a little fun with this, Eric. Okay. Well, Raymond James used to make $300 on stock trades, and so we had to move away from that. So, not anymore. And Jeff's laughing, too. Yeah. That's funny. Jeff's bought a lot of stock for, for Eric. That's, that's the inside joke there. Just lastly, the, the consumer, you know, you guys were pretty bearish mid, mid 2023. I understand you're running kind of some consumer conferences, and, Parker did some great work on some correlations, and we were seeing kind of down mid-single digit, with... We were trying our best to find what's, what's the right analogy for somebody buying a funeral home? Or not a funeral home, a cemetery plot. Preneed cemetery. Yeah, cemetery, preneed cemetery. So what do you think explains the rebound in the fourth quarter when the indicators we were looking at would not have suggested that rebound, but you saw it? Have you been able to pull on that thread anymore since you've talked to the market? Well, I think part of it that differentiates is what I said before. I, I think you had some slowness that occurred because of the situation of the inventory- Mm-hmm during the first quarter that went into the second quarter and really the third quarter before we can get the inventory up and running. And I think we saw some velocity, specifically on the West Coast... associated with those specific, specific properties. But generally, other than that, we haven't seen anything, you know, that makes us, makes us unique or certainly nothing I can point to, John, other than that inventory situation being rectified and being back open for business. And when you do that, you know, sometimes you can market it that way, and you get a nice little bump and flood of people that want to, you know, more immediately come. During that year, last year, you know, we saw like, what a lot of other, discretionary or purchases or retail customer-facing companies or industries were seeing, and that is the high end, which we call north of $80,000 purchase, of which we probably have, you know, $150 -200 million of those a year. You know, we saw that being really robust, frankly. And when inflation was hurting, it was hurting that core customers of ours, which are below that $80,000 level purchase, obviously. And in the fourth quarter, we saw that core customer below $80,000 come back. So the 9% growth, which equates to about $30 million of preneed cemetery sales of growth, is what I mean by that. You know, about half of that was from the core customer, and half of that was from the high-end customer, and we saw that velocity come back for that core customer below $80,000. I do think, as I said, some of that is the inventory, which is ready to be sold again, and there's some pent-up demand in California at some of our largest parks, and are clearly our largest market. But other than that, we haven't cracked the code and said, "This is why we're different than anything else that we're seeing out there. Relative to the 9 you did in the fourth quarter, just remind folks what your guidance implies at the midpoint for preneed cemetery in 2024? Yeah, generally, on an ongoing basis, we should see preneed cemeteries grow like mid-single digits. So, you know, call it, call it 4%-6%, 3%-6%, something in there, in that area. We think it's gonna be less, slightly less than that. It's going to be positive, but slightly less than that in 2024. You know, I think we're calling it, you know, 2%-4% or 2%-5%, so lower single digits. And the reason is, as I said earlier, today, is that the funeral volume is the number one lead for preneed cemetery. You're essentially taking a loved one, and you've interred that loved one, and then the family wants adjacent property around that loved one. So that's the number one lead. With funeral volumes being flat for the reasons we've already talked about, that's what's still, you know, creating a little bit of dampening effect to getting back to kind of the pure, normal growth rate that we hope to see next year in 2025. We have a couple of minutes. Any questions from the group? All right, well, then, I had a brilliant question, and it's a senior moment here. That's what a breakout session's for. Well, I know. It was really a good question, too. I'm sad. Thank you. Yes, sir. Your market share, like, in your slides, you show, like, 16% market share. That's been kind of the same for maybe 10 years or more. Why do you think you have market share? Yeah, the 16- The question, sorry, the question is about market share. Yeah. The question is about market share, and our 16% market share is a combination of the two segments. So as I said, cemetery is probably 28%-30% share, very large cemeteries, even though there's only 500 of them, compared to thousands and thousands across North America. Funeral is the 11%-12%, 11%-12%. And frankly, we have seen it move to, you know, to some degree. Our memorial's 14%, 15%, and now 16%. During COVID, the funeral segment gained, you know, call it 150-200 basis points a share. I didn't really think any of that was gonna be sticky, to be frank, you know, because ultimately, the independents got overwhelmed and had to shut down, and we had the scale and the capital and the wherewithal to keep going. So I thought that'd be more temporary, but probably about, you know, half to three-quarters have gone back to normal. But we still have, you know, a good 25 basis points or even up to 50 basis points in some markets of that incremental share that has remained sticky post-COVID.