Good day, and welcome to the SCI First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on a touch-tone phone. To withdraw your question, please press Star, then two. Please note this event is being recorded. I would now like to turn the conference over to SCI Management. Please go ahead. Thank you, and good morning. This is Debbie Young. We appreciate you joining us today as we talk about our first quarter results. We're gonna have some prepared remarks about the quarter from Tom and Eric in just a moment. But before that, let me quickly go over the Safe Harbor language. Any comments made by our management team that state our plans, beliefs, expectations, or projections for the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such statements. These risks and uncertainties include, but are not limited to, those factors identified in our earnings release and also in our filings with the SEC that are available on our website. Today, we might also discuss certain non-GAAP financial measures. A reconciliation of these measures can be found in the tables at the end of our earnings release and also on our website. With that out of the way, I will now turn it over to Tom Ryan, Chairman and CEO. Thank you, Debbie. Hello, everyone, and thank you for joining us on the call today. This morning, I'm gonna begin my remarks with some high-level color on our business performance for the quarter and provide some greater detail around our solid funeral and cemetery results. I will then close with some thoughts on our outlook for the rest of 2024. For the first quarter, we generated adjusted earnings per share of $0.89, which compared to $0.93 in the prior year, or a decline of $0.04 per share. We had anticipated a decline in earnings per share from operations for the quarter due to lower funeral volumes, lower non-funeral home revenues, and lower cemetery revenues recognized from completed construction contracts projects. While these trended as we had anticipated, stronger than expected preneed cemetery sales and a slightly better funeral sales average allowed us to reduce the operating shortfall, resulting in a better than expected $0.06 per share decline in operating earnings per share over the prior year quarter. Below the line, the favorable impact of a lower share count and a lower income tax rate more than offset the impact of higher interest expense, producing a net favorable increase in earnings per share of $0.02, resulting in a combined net $0.04 decrease in earnings per share for the quarter. Now, let's take a deeper look into the funeral results for the quarter. Total comparable funeral revenues declined $9 million, or about 1% over the prior year quarter. As an increase of $4 million in core funeral revenue was more than offset by an expected $12 million decrease in non-funeral home preneed sales revenue. Although core funeral volume declined 3% compared to the prior year quarter, we believe due to the COVID pull-forward effects, volumes were in line with what we'd anticipated. Our core average revenue per service grew over the prior year by an impressive 4%, even after absorbing the negative effects of a modest 70 basis point increase in the cremation mix. SCI Direct non-funeral home preneed sales revenue decreased by $12 million, primarily due to operational changes in our California market with respect to the timing of merchandise delivery. We would anticipate the quarter-over-quarter net revenue decline to diminish over the coming quarters as compared to the first quarter of 2024. It is our intention over the next several quarters to implement this and other operational changes across the remaining non-funeral home markets as we begin offering an insurance-funded product for SCI Direct service and merchandise sales, as well as shifting certain travel protection sales to an insurance-funded product where it makes sense. While these changes will defer recognition of these revenue streams until the at-need cremation service is performed, it will also generate significant general agency revenue upon the sale of the preneed contracts, which we expect to mitigate the effect of the revenue decline from these operational changes. Over the coming years, we would expect to grow general agency revenues at a very healthy and sustainable growth rate, and when combined with organic growth in the number of contracts maturing from the preneed backlog for SCI Direct, should result in very impressive revenue and profit growth rates for SCI Direct. From a profit perspective, funeral gross profit declined $18 million, while the gross profit percentage declined by 270 basis points to about 22%. This decrease is primarily due to the decline in revenue and an increase in annual incentive compensation costs over the prior year quarter. Preneed funeral sales production decreased by $8 million, or about 2% over the first quarter of 2023. This was primarily due to a decline in our core sales production, as non-funeral home sales production was relatively flat over the prior year quarter. Now, shifting to cemetery. Comparable cemetery revenue increased by an impressive $21 million or about 5% compared to the prior year first quarter. Recognized preneed revenue accounted for the preponderance of the increase, growing by $20 million or 7%. Growth in preneed cemetery sales production of $24 million or almost 8% over the prior year quarter, delivered $8 million of the $20 million of recognized revenue increase, as the preponderance of our sales production increase was deferred and will be recognized in subsequent quarters. Preneed merchandise and service revenue delivered $12 million of the recognized revenue increase, as robust increases in contract averages favorably impacted by increased merchandise and service trust income, combined with a slightly higher delivered units, delivered 14% growth as compared to the prior year quarter. $17 million of the $24 million increase in preneed cemetery sales production was generated from a 6% growth in core cemetery sales over the prior year quarter. Large sales accounted for the other $7 million of the increase, which was a 19% increase over the prior year total. Cemetery gross profits in the quarter increased by $3 million from increased revenues, and the gross profit percentage declined by 100 basis points, still generating margins over 32%. This decline in gross profit percentage was primarily due to an increase in annual incentive compensation costs as compared to the prior year quarter. Now, let's shift to discussion about our outlook for 2024. As you saw in our earnings release, we're confirming our normalized earnings per share guidance range of $3.50-$3.80 for 2024, or a midpoint of $3.65. Remember, the first quarter was our most challenging year-over-year comparison, because we had expected the most difficult comps to occur in the quarter in both revenue recognized from cemetery-completed construction projects and non-funeral home preneed sales revenue. We also knew our most challenging comparison of variable interest rates on our floating debt would occur in the first quarter. As we think about comparing the rest of 2024 earnings per share expectations against our last nine months of 2023 normalized earnings per share, we would expect year-over-year growth in earnings per share in each of the subsequent quarters, driven by increased profitability in both the funeral and cemetery segments. We would expect low single-digit increases in funeral revenues, and we would anticipate increased sales production and increased revenue recognized from completed construction projects combined to drive mid-single-digit increases in cemetery revenue over the coming nine months. In conclusion, I'd like to thank the entire SCI team for all that you continue to do every day for our customers, our communities, and each other. You are what makes our company great. With that, operator, I'll now turn the call over to Eric. Good morning, and again, a warm welcome to everybody joining today's earnings call. Similar to the way Tom just ended his remarks, before I get into my prepared remarks, I want to take a moment as I customarily do, but again, never without genuine gratitude, to extend my sincere appreciation to our dedicated team of over 25,000 associates at SCI. Your constant commitment to serving each and every one of our client families with empathy and unwavering excellence is truly remarkable. We take immense pride in the fact that our associates embody our fundamental values of respect, integrity, service excellence, and fostering enduring relationships. So thank you. So now, let's go ahead and shift to my remarks for the quarter. I'm going to first discuss our cash flow results before moving to capital investments during the quarter. I'll end with providing some forward-looking commentary on our outlook, and also finish with talking about our current financial position. So in the first quarter, we generated an impressive adjusted cash flow from operations of $220 million. This is flat compared to the prior year and was in line with our expectations. Lower operating income and higher cash interest payments were more than offset by slightly lower cash taxes and favorable working capital. So let me give you a little bit more color on those items... Operating income declined by about $13 million quarter-over-quarter, due to an expected decline in earnings that Tom just walked us through. Additionally, we saw $14 million of higher cash interest payments during the period as anticipated, and as a result of higher weighted average interest rates and balances on our floating rate debt during the quarter. Cash taxes in the quarter were slightly lower than the prior year by about $4 million. Now, while federal cash tax payments are generally not made in the first quarter, I want to reiterate from my previous comments, that we expect our 2024 cash taxes to range between $25 million-$35 million. 2024 is being impacted from a temporary benefit of about $150 million of reduced cash tax payments as a result of the tax accounting method change that I've now discussed over the last several quarters. And as we look to 2025 and beyond, we expect cash taxes to revert toward a more normalized trend that, again, would not include this $150 million benefit beginning in 2025. And finally, working capital provided a net $23 million source of cash during the period, and this was primarily driven by favorable impacts associated with lower 2023 incentive comp cash payments that were actually paid this quarter in 2024, and I think I did mention that in the last quarter's call as well. I'll now touch upon our capital investments in the first quarter. We invested a total of $103 million into improvements of our existing funeral homes and cemeteries, new growth opportunities, and real estate for future expansion. Let's break this down a little further. We invested $70 million of maintenance capital back into our current businesses, with $39 million of cemetery development, $25 million into improvements to our various funeral and cemetery locations, and $7 million into our digital strategy and other corporate investments. The cemetery development spend increased on a year-over-year basis, as we continued to execute on opportunities to invest in high-returning cemetery construction projects. And remember, these projects generate high-quality cemetery property for our customers that help to drive the strong preneed cemetery results we've seen this quarter and recent quarters. We also invested $16 million of growth capital in the quarter towards the purchase of real estate, construction of new funeral homes, and the expansion of existing funeral homes and cemeteries. Finally, we made several accretive acquisitions in the quarter, closing on $16 million in total. We remain optimistic about the activity we're seeing in the second quarter and the pipeline through the remainder of the year. And with that, we now believe we'll be at the high end of our $75 million-$125 million acquisition investment target for 2024. In addition to the investments into our business and the acquisitions, we returned $93 million of capital to shareholders in the quarter through $44 million of dividends and just under $50 million of share repurchases. We purchased about 700,000 shares at an average price of about $70 during the quarter, and this ended the quarter with just over 146 million shares outstanding. Now, subsequent to the quarter, we continue to be active on the repurchase of shares, acquiring about another 700,000 shares for just under a $50 million investment. So in the press release, while we've confirmed our 2024 Adjusted Operating Cash Flow guidance, which remember, is a range of $900 million-$960 million with a midpoint of $930 million, and we deem this again as appropriate. When we deduct $325 million of expected maintenance capital, this results in an impressive adjusted free cash flow of just over $600 million or over $4 adjusted free cash flow per share for 2024. In addition to the strong cash flow foundation, we also have a very favorable debt maturity profile and liquidity of just over $900 million at the end of the quarter, which consists of a cash balance just over $200 million, as well as approximately $700 million available on our long-term bank credit facility. Our leverage at the end of the quarter remained close to the year-end number at 3.59x net debt to EBITDA. And again, we maintain our near-term bias towards the lower end of our targeted leverage range of 3.5-4 times, until we have a little bit more clarity as to where interest rates will go from here for the rest of the year. So in closing, I'd like to reiterate that our solid balance sheet, our ample liquidity, and our predictable cash flows will continue to fortify our capital investment strategy of investing to the highest and best use in order to maximize shareholder value. So before we open the call out to questions, I have one more topic I'd just like to mention very briefly. And I'd like to- ... recognize Debbie Young, who most of you on the call know Debbie very well. Some of you on the call, as I look at these questions with A.J. and perhaps Ransom, have been around for the last many, many years, where Debbie has led of her 37 years at our company, has led investor relations for over 25 years, or as I like to say, over 100 quarters, she's led our investor relations program here, and has done a remarkable job. Debbie has decided to retire at the end of this quarter, and ultimately will spend more time with her husband, Scott, and her son, Matthew. Please join us. We want to wish Debbie the best of luck. From a personal perspective, what makes a job great is when you're able to work with great people that become your friends over the last several years. And, Debbie, you, you've made a lot of tough times here early on, 25 years ago, a lot easier, and you've made the good times a lot better. For that, I thank you, and we all thank you. Hear, hear. With that, Cindy, operator, we'll go ahead and pass it back to you and open up the call for questions. We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from A.J. Rice of UBS. Go ahead, please. Thanks. Hi, everybody. Best wishes to you, Debbie. I'm glad Eric didn't try to guesstimate how long John Ransom and I have been doing this in coverage, guys. A couple of questions, if I could. First of all, on the, I guess there was an announcement out of the attorney general out of California reaching a settlement regarding some cremation practices. I wonder if you'd just give us your perspective on that. Does it change anything going forward? And yeah, just your perspective on it would be helpful. Sure, A.J. Thanks for the question. So after about eight years of back and forth, we reached a settlement with the California Attorney General that includes a cost reimbursement and civil penalties of $23 million, which you probably saw in the press release, A.J., and provides certain preneed contract customers with the right to receive refunds. There's no admission of any wrongdoing or fault by the company or the officers of the board. We believe that our fourth quarter 2022 accrual that we made in relation to this is adequate to cover the $23 million dollar civil penalty and reimbursement, as well as any estimated cancellations from the customer contracts. A little history here, you know, the lawsuit was brought by the state, and was primarily based on the interpretation of the Short Act, which is, you know, under California law, very specific to California. And while we don't agree with, you know, California's interpretation, we've agreed to certain operational changes that allowed us to remedy the dispute. And AJ, you mentioned, you know, any changes, and I think in my comments, I mentioned that, in California, we had stopped delivering merchandise, and that's one of the reasons that the non-funeral home revenues have been down. And as we've been, you know, finalizing these negotiations, AJ, we started looking at the model. And while this is very specific to California, and again, we believe in compliance with every law, we saw an opportunity to kinda streamline the SCI Direct model. And so, as I mentioned, over time here, we're gonna transition SCI Direct to go from delivering merchandise in advance and delivering TRPP and shift that product to an insurance product. And the reason we could do that, one, is to streamline the model. Two, it provides protection for our customers that pay over time. So by having an insurance product, if I pay over time and die, then I'm fully paid for, so we can add that benefit. It also allows us to kind of leverage the value of our insurance sales production stream because we have such a powerful business, and this will just add to the power of that. And it'll generate general agency revenues, which will offset the effects of not delivering the merchandise. And so now we're gonna generate these revenues up front, and the average contract revenue coming out of the backlog of SCI Direct is gonna be significantly higher. So I think it's a win-win for everybody. We've settled a dispute with the AG, and we're happy about that. So hopefully that, you know, covers the questions you guys may have around that topic. Yeah, no, that's great. And, I know you commented on the acquisitions in the prepared remarks a little bit, but I wondered, obviously, you've got the expiration of the standstill arrangement related to Stewart, that's done, and that would open up some new market opportunities that haven't been available to you for a while. And I would also assume, and just wanna confirm, that, to the extent that you can do any transactions in some of those markets that hadn't been available to you for the last 10 years, would those not be some of the more accretive deals that you can do because you already have some facilities in those locations? Yeah, I think, again, because you dated yourself by saying you met Debbie when she was a teenager. You're exactly right, A.J. I do think the markets that will open up are ones that we really like and that we've got, you know, presence in. And I think to take your question in different pieces, you know, Eric mentioned we feel really good about the rest of the year, and that means, you know, we've got a number of deals that are under letter of intent, other offers that are in, you know, kind of final stages of negotiation. I think the way to think about these markets, though, A.J., to your point, is, as we've always said, businesses come for sale when the seller's ready to sell. So while it seems like a floodgate opens, it isn't really true. What we found over the last 10 years is there's been times where businesses have come up that we would have loved to participate in, and it's precluded us from participating because in our negotiations, we have to say, "Hey, by the way, we have to wait on the Federal Trade Commission to approve this." Well, we're not a very attractive buyer at that point. So what this is gonna allow us to do for transactions under, I think it's $120 million, is you just don't have that necessity of going to the FTC by a prior notice that's out there. So again, I think it's a plus. I think it's gonna be good, but you know, I'd say today, absent that, we still feel very good about the pipeline of acquisition. Yeah. All right. Thanks a lot. Our next question comes from Parker Snure of Raymond James. Go ahead, please. Hey, good morning. You have Parker on for John Ransom. Maybe just talk about the cemetery pre-need production. It was up, you know, almost 8%. Anything notable to call out there? Was there any bounce back in the Qingming sales that maybe you lost last year? Anything notable in terms of geography and then maybe the high end versus the low end? Thanks. Sure. The, you know, Qingming, again, as you know, kind of crosses quarters. We have an impact that typically happens in the last couple of weeks of March and probably will have a few weeks in April. But I think we would tell you that we're very pleased with, you know, Qingming this year. It's been and I think, you know, again, it shows in the first quarter results, too. So, yeah, we feel great. I mean, the nicest thing, I think, Parker, about the first quarter is not only did we have great large sales that grew 19%, but our core, you know, products grew by 6%. So we're really hitting on all cylinders, hitting in a lot of different markets and really feel good about the direction and momentum that our sales team has. But again, you know, we want to caution. The one thing that we talked about this year is a big lead source for preneed cemetery sales is funeral volume and therefore burial volume. And, you know, we still have a little bit of hangover as you, as you think about the pull-forward effect. And so I think it, it can put a little bit of pressure, but a tiny bit of pressure on that lead source. The good news is, our sales teams are overcoming that with increased digital leads, better follow-ups, great products in our cemeteries that they're available to sell. So we feel great about the momentum. You know, it's still the first quarter, so we don't want to spike the ball on the forty. But I feel confident about where we're headed in the rest of 2024 and maybe even more confident about 2025 and 2026. Okay. And then just any updated thoughts on the FTC funeral rule? Any, you know, any updated thoughts on timing and when we might see that? Hey, Parker, it's Eric. No, we really don't have any updated thoughts. I mean, we've been very consistent with it, that you know, we continue to have a very good relationship with the staff of the FTC and helpful to work through it. But you know, we submitted stuff all the way back in October of 2023. It was kind of the official last thing that we have done with them. And you know, I think the whole industry is waiting around for finalization. The important thing to remember, though, is you know, we don't think there's anything that's coming out of the rule in our vision, at least, that's gonna have a material effect to our company one way or the other. And, you know, we think ultimately it's a good rule for the industry, but nothing that's gonna materially move any of our projections from a financial impact or anything. All right, great. Thanks so much, and congrats, Debbie. Our next question comes from Joanna Gajuk of Bank of America. Go ahead, please. Hi, good morning. Thank you so much for taking the questions here. So I guess a couple follow-ups. So I guess the—not the last topic, but the one before, around the cemetery pre-sales production, it sounds like it's actually the large sales, but also core was up. So did I read it right, that core was up mostly on pricing? And I guess what gives you the ability to, you know, to drive pricing, I guess, while, you know, inflation and I guess interest rates still high? So can you kind of talk about maybe some more details in terms of, you know, the consumer, I guess, perception and demand in both, I guess, core and also large sales? ... again, like I said, the large sales continue to, you know, go at a very nice clip. I mean, if you look back in time, they're significantly higher than they were just, you know, five, six years ago. And a lot of that is, again, back to the product that we're able to put in front and our sales force ability to close. And so as you think about that high-end, you know, sale, it's, you know, depending on seasonality, I think second quarter is typically stronger, and fourth quarter. You know, we're gonna do about probably $40 million-$50 million a quarter. I mean, that's kind of the pace. And again, that, I think, is more contingent with where the economy is, where the stock market is, because those buyers are typically not borrowing money to buy them. They're putting cash, and they either feel good about it or they don't. That's there, and it's been very consistent, and we feel good about, you know, the temperature of that customer. You know, on the other end, we saw a great activity. Again, our activity for the quarter was relatively flat from a units perspective. But keep in mind, you know, I think we're somewhere around 10% or 11% higher than we were in 2019. So, we're at elevated levels of volume, and you're right, most of the increase in the core is related to average. But remember, Joanna, you know this from being in a lot of our cemeteries and seeing it, some of that is inflationary pricing, but not an insignificant portion of that is a, what I'll call a trade-up. What that is, by investing in, you know, different tiers in the cemetery, you're seeing customers come in and buying an, an enhanced product, where we spent some money, you know, made a better product, and people are trading from, you know, this level of product up one, and that has an effect on average sales. So, so it's really a combination of things that we think will continue, inflationary pricing and enhanced offerings in our cemeteries, which we continue to invest at the levels of, you know, $100 million-$130 million a year in bringing on new inventory property. No, exactly. Yeah, that's what I was sensing. I mean, thank you for the 10-11% higher, 'cause I mean, I don't have the breakdown, the large versus core, but just looking at the pre-sales production dollars, it's like a 9% CAGR versus first quarter of 2019. So to me, it sounds like, yes, there's definitely demand. There's definitely demand and people willing to spend money, so I guess that's good there for the business. And if I may, a couple of other follow-ups. So on your comments around the deal spending for the year, seems like you, your confidence increased, and you think you're gonna be at the highest. Does this mean anything meaningful for the guidance for your year in terms of, you know, accretion from these deals? Moving from, you know, midpoint to higher, or I guess that's maybe not big enough to make to move a needle for the year. Yeah, Joanna, you're right. You know, while we're excited about it, it's not gonna have a material impact on our guidance. Obviously, it gives us a little bit of more confidence in achieving the range. And like normal, you know, it's the first quarter of the year. I think as we get through a half year, we'll have a better idea of that pipeline, we'll have a better idea of sales. It's just, you know, three months is not a year made. Maybe you can also give us a sense of the assets that were acquired in the quarter and also, you know, what's in the pipeline. I think Eric mentioned that the assets we got in the first quarter were predominantly funeral homes and cremation. I don't think we had any cemeteries. As you think about the pipeline, and again, I always hesitate to say anything until they're closed, but we do have a few deals that are under letter of intent, so in the process of closing. And we also have, I'd say, some deals that are, you know, very close to getting under letter of intent. And it's a nice mix of both funeral, and I think we've got some investments also in cemeteries that hopefully will be coming online. So it's a multitude of deals, and, you know, some will close and some won't. But I'd say based on the level of activity, we feel like Eric said, pretty confident in achieving the range and probably towards the high end of the range. Okay. And I guess it also relates to my other question on capital deployment. So this confidence in the deal spending, is that a reason why you did not really buy that much stock in the quarter? I mean, it sounds like you, before in Q2, you already bought the same amount, so maybe it was just timing of things. But anything to read into that? I guess the Q1, the $50 million was the lowest since, like, 2019. Yeah, I'd answer it two ways. I think we continue to have a track record of, based on our opinion of the value of ramping up and ramping down. So you're always gonna see some volatility among quarters and quarters as we as we form that opinion. We definitely believe heavily in the share repurchase program right now, so I don't want you to take that any differently, including what we did in the quarter and currently, what I said we've already done in this quarter already to date. But the second piece to that is, you know, last quarter, Q1 of last year, you know, we actually took on debt to do some of the shares and some do some acquisitions and stuff, and we paid down debt, and it's about a $100 million swing. That's kind of where that capital went this quarter, where we paid down debt. Again, I don't think that's a pivot in strategy. Three months doesn't make the year, as Tom just said. But from a timing perspective, we continue to have, you know, a little bit of a bias towards the 3.5 side of the 3.5-4 times leverage. That's not new. That's what we've said.... Obviously, I think everyone was in the boat of expecting some floating rate relief as we went through the year. That relief appears to us and appears to the market as well, that if it does come, it's gonna come in the back half of the year. And I think that went into some of the thinking during the first quarter. But I'd also reference again, the momentum we have in the share repurchase program, subsequent just in the first month, is very strong. So hear us very clearly about how we view it very favorably at these levels right now. Joanna, just to add a little bit. There's a technical reason, too. Obviously, when we're in quiet periods, we can't make decisions day-to-day. We have to put a formulaic number in there, and we wanna be able, if it's super cheap, under a formula, to buy it, but maybe not as aggressive, and we can't change that. If you think about the first quarter, we go quiet, around, probably, like, November fifteenth, and it goes all the way until you release earnings. So it's the longest period of time where you really don't have a lot of discretion. And so I think that's probably to Eric's point, you know, didn't spend as much as you might think, and now that, you know, you get into these months, it's shorter, shorter windows. Okay. Yeah, got it. It makes sense. I guess if I might just, very last one. Thank you. When it comes to just, looking out, on the last call, you made some comments about 2025, and I guess, when talking about the production and cemetery preneed sales production, you said, you know, you're seeing great momentum, you know, this year and heading into next year. So should I read into this? I kind of feel the same way as you did, you know, I guess, maybe less than three months ago when you reported Q3 through Q4, and you talk about, you know, returning to 8%-12% EPS going 2025. Kind of any update to that commentary? Thank you. Yeah, I just think, Joanna, we'd say that we felt confident then, and I'd say I feel a little more confident now because I think the first quarter, from an expectations perspective and the trends that we're seeing, are really positive. I also think, you know, getting this, you know, AG matter behind us and allowing us to transition to our new SCI Direct strategy, which should, as we get through the first couple of years, provide us a real robust growth platform for that business. Because, again, we're gonna generate general agency revenues and be filling up the backlog with much more robust, you know, funeral averages. So we really feel great about where we are and are excited about getting into these months. And again, digital leads continue to grow at a pretty pronounced clip. Our sales teams are super effective, super productive. You know, I think Jerry's running a sales team that's 600 people lighter than it was before we went into. COVID. -to COVID. As you mentioned, we got 9% compounded growth rate over the period, with 600 fewer counselors than we had in 2019. I'd say that's great leadership in sales, great leadership in marketing, and we just appreciate the effort and are excited about going forward. Great. I like the excitement. Thank you. Our next question comes from Scott Schneeberger of Oppenheimer. Go ahead, please. Thanks very much. Congratulations, Debbie. 100 quarters is a lot of quarters, a career well done. I guess I'd like to start out, just funeral volume, kind of a high-level question, Tom, probably for you. You know, from the pandemic pull forward, we've been going through this reversion period. There have been a lot of puts and takes impacting it. Where are we in that? What inning would you say we're in, in that reversion? When do you expect, you know, maybe we see normalization and maybe some improvement to funeral volume? Thanks. Yes, Scott, I think we felt like, based, again, and this is, you know, a little bit of crystal ball, but we felt like this was the 2024 was kind of the last year that we had the, the net true hangover as you think about the impact. So I think the way to think about 2025, is you still have a few things in your face, but they're so slight that we believe our market share gain and the natural death rate will overcome it. So as we think about 2025, we feel good about flat to... You know, and again, you never know what happens with flu seasons, but, but we feel like it's a, a, a positive comparison as you move out past 2024. Then as you get, you know, into the back half of the twenties, a lot of things are moving your direction, including demographics. I think you're through the headwinds of COVID. And again, with our growth in pre-need, we believe continuing to capture market share, that should be reflected in our funeral volumes as you think about the back half of the decade. Thanks. For Eric, one for you, just and then a quick final one after. But Eric, what are you thinking about interest rates in the variable for the back half of the year? Just any change to what you were thinking last quarter's update? You know, we have the guidance update, but specifically on that line. Thanks. ... Yeah, I mean, we're about 7.4%-ish right now on the, on our floating debt. You know, most of the comparison, first of all, the tough comparison is gonna be the first half of this year, because it was already up about that point as you got to the second half of 2023. When you look forward, though, the, the rest of the year, you know, I think like everybody else, we thought there could have been, you know, 3 or 4 rate cuts, and now we're probably thinking that it's more like 2-ish rate cuts in the back half of the year. Obviously, we could be wrong, but the one thing that I would tell you, Scott, is that's not very material. You know, our floating rate debt's about 30% of our total debt, and when you just take, you know, a 25 basis point cut and the floating rate expected to follow and just happen in the last couple of months of the year, it's not gonna be very material with us at all. So it's not gonna move the needle, not gonna move any of the guidance or anything like that. But so that you know, in the modeling, though, we obviously, you know, took a little bit of a lighter point of view in terms of cuts, like most people have, reading the market and some of the comments out there. Thanks. Appreciate that. And then that last one, just cremation mix. The year-over-year, a little lighter than historic trend. Is this just a factor of comps or a year-over-year comps or anything else we should be considering there? Thanks. You know, I'm thinking Jay Waring called you maybe, but I think our belief is that the trends will probably revert to the mean. I think what you've seen over a number of years, sometimes we've experienced, you know, 200 basis points, we've experienced 50 basis points, and so it can ebb and flow, and we still think, you know, more likely than not, we're somewhere in the 100-150 basis point change a year. We have noticed that in our numbers, and we're excited about it. I think it's great. I just don't know if it's a trend yet to call. All right. Thanks, guys. Appreciate it. The next question comes from Tobey Sommer of Truist. Go ahead, please. Thank you. And Debbie, the century mark seems like an apropos time. Could you comment on your expense inflation, how you see that trending in 2024 versus last year, particularly on the labor and merchandise side? Yeah. On the merchandise side, again, we've got long-term agreements that have, you know, inflationary caps on them. So I feel like we have a good handle on knowing what our inflation will be. And generally, I would tell you, it's been trending lower than general inflation. So I think we've been able to hold merchandise costs through those contracts. Also, I think just kind of proactive transition to different products, which our, you know, pricing and products team do a great job of, of flexing in. So really not seeing anything that, you know, we're not happy with there. On the wage front, you know, we're like everybody else, and I think we have experienced over the last few years, wage inflation at, you know, above 4%. And what I'd tell you is we're starting to see in 2024 is that to normalize a little more and reach back into the high 3s. So I think we're seeing some wage inflation subsiding, but obviously, since wage inflation was probably closer to 2 over the last 10 years or so, it's still elevated as you'd think over history, but we're definitely seeing it subside a bit and push back towards the 3s and out of the 4s. Thanks. And if you were to look at your customer base and your sales experience on a low, mid, and sort of high-end customer basis, how... What sort of story would the revenue trends tell us in cemetery and funeral, if looked at through that lens? Yeah, you know, I think it's less an issue on funeral and probably a little more, you know, issue on cemetery, and that really gets back to the pre-need nature of cemetery versus at-need. So from an at-need perspective, I think people, you know, make decisions and spend money, and they find a way, right? They pass the hat, they do what they gotta do, and it's something that's important and emotional for them. You know, buying pre-need cemetery property is a lot less emotional. And so I think you when you get into periods where interest rates go up or things like that happen, you're gonna be a little more price sensitive. I would tell you again, at the high end, we see a lot of demand and continued success. At the mid-end or the mid-level, I'd say, we continue to see a lot of interest and good activity. And even at the low, we're still seeing good activity. I think, I think I would tell you by looking at the data, that consumer is a little more challenged than the mid-level consumer, that I think you're seeing other industries talk about. And again, I just think that gets back to inflation and not our product, but their everyday lives and how they're being impacted by the price of gasoline, the price of, groceries. So yeah, I think there's probably a little more difficulty to think about that low-end customer and their willingness to engage in a product that they don't need exactly right now. So we try to, a s you know, we've put together some plans and strategies to help them get into those contracts, whether it's terms or interest rates, but keep that consumer active, and I think we've done a pretty good job of it. Thank you very much. This concludes our question and answer session. I would like to turn the conference back over to SCI Management for any closing remarks. We want to thank everybody for being here today. I want to reiterate Debbie Young and what a superstar she's been to us. We love her very much. We're going to miss her, but we're so happy for her next chapter. So Debbie, continued success, and we're gonna miss you, girl. Thanks, everybody. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.