Cadrenal Therapeutics Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 1, 2024

There are 8 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Carriage Services Second Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Mesker, President. Please go ahead, sir.

Speaker 1

Good morning, everyone, and thank you for joining us to discuss our Q2 results. In addition to myself, on the call this morning from management are Carlos Quezada, Chief Executive Officer and Vice Chairman of the Board of Directors and Kathy Shanley, Chief Accounting Officer. On the Carriage Services website, you can find our earnings press release, which was issued yesterday after the market closed. Our press release is intended to supplement our remarks this morning and include supplemental financial information, including the reconciliation of differences between GAAP and non GAAP financial measures. Today's call will begin with formal remarks from Carlos and Kathy and will be followed by a question and answer period.

Speaker 1

Before we begin, I'd like to remind everyone that during this call, we'll make some forward looking statements, including comments about our business, projections and plans. Forward looking statements inherently involve risks and uncertainties and only reflect our views as of today. These risks and uncertainties include, but are not limited to, factors identified in our earnings press release as well as in our SEC filings, all of which can be found on our website. Thank you all for joining us this morning. And now I'd like to turn the call over to Carlos.

Speaker 2

Thank you, Steve, and thank you all for joining our 2nd quarter earnings call. We're excited to share our progress in executing our 5 year strategic objectives, which delivered another outstanding financial performance this quarter. But before we do, I want to express my heartfelt gratitude to every Carriage employee for their continuous commitment to excellence and never settling for less. Your dedication makes a real difference for the families we serve in our company. We sincerely appreciate your support and commitment to our shared goals.

Speaker 2

I want to thank Kathy Shandley, our Superstar Chief Accounting Officer for participating in this call as the search for a new CFO continues. On today's call, I will share some of our key financial metrics and provide an update on our most relevant For the Q2, our total For the Q2, our total revenue was $102,300,000 a significant increase of $4,600,000 or 4.8 percent. This quarter marks another remarkable milestone in Carriage history as it is the 2nd time we have surpassed the $100,000,000 mark in single quarter, the first being the Q1 of this year. This exceptional results were primarily driven by a phenomenal 31.1% increase in preneed cemetery sales compared to last year and the continued execution of our funeral home pricing strategy, which boosted our funeral average revenue per contract by $2.12 or 4%. This financial success is a testament to our strategic planning, which has positioned us for continued growth and success as well as the dedication of our team.

Speaker 2

As we look at each of our revenue segments, total funeral home operating revenue decreased by $508,000 or 90 basis points to 59,200,000 This revenue decrease is driven by the expected slight decline in volume resulting from the pull forward effect we have discussed in prior calls. However, we're able to make up a bit over $2,000,000 in revenue through our increased average revenue per contract, which has delivered an increase in total funeral fuel 0.5% compared to 36.1% last year. A comparable revenue on a lower cost base demonstrates our unwavering commitment to cost control and a strong partnership with our field leaders. Now let's move to cemetery operating revenue. We ended the quarter at $34,800,000 an increase of 5 point compared to the same quarter last year.

Speaker 2

For total cemetery field EBITDA, we finished at $17,100,000 an increase of $4,200,000 or 32.6 percent and a total cemetery field EBITDA margin of 49.1%, an increase of 450 basis points compared to 44.6% last year. This is another key achievement for Carriage and we couldn't be prouder of our entire preneed cemetery sales teams for their determination to provide day in and day out best in class performance in preneed sales. For total financial revenue, we ended the 2nd quarter at $7,100,000 an increase of $1,000,000 or 16.9 percent. This growth was driven by the continued execution of our pre need funeral sales strategy, which delivered an increase in general agent commissions ending the quarter at $1,400,000 an increase of $1,000,000 or 2.51 percent compared to the 406 during the same quarter last year. Our preneed fueling strategy continues to yield positive results and we're excited about our future performance as we continue to build upon our sales strategy.

Speaker 2

As we move to adjusted consolidated EBITDA for the Q2, we finished at $32,600,000 an increase of $3,900,000 or 13.6 percent. The combination of a higher average revenue per contract and the continued execution of our cost management initiatives delivered great success, demonstrated by our adjusted consolidated EBITDA margin of 31.9%, an increase of 2 50 basis points compared to the same period last year. From a GAAP perspective, net income ended at $6,300,000 a decrease of $2,000,000 compared to the previous year. This decrease was driven by non recurring expenses related to our strategic review process and our prior CFO separation agreement. When adjusting net income for these two items, we ended at $9,900,000 an increase of $1,700,000 or 20.1 percent.

Speaker 2

Kathy will share more details on overhead later on the call. Adjusted diluted EPS in the Q2 ended at $0.63 per share, an increase of $0.10 or 18.9 percent. And with the execution of the amendment to our credit facility, we are very well positioned to unlock additional value for shareholders due to the reduction of near term interest expense. We are very proud of these results and after reviewing our key operational metric trends and forecast, we're excited to share that we're increasing our guidance for 2024 to the following ranges: $390,000,000 to $400,000,000 in total revenue adjusted consolidated EBITDA of $117,000,000 to $123,000,000 and adjusted diluted EPS of $2.30 to $2.40 Adjusted free cash flow remains at $55,000,000 to 65,000,000 dollars Kathy will share more details about our revised guidance. Our 2nd quarter performance marks 6 out of the last 7 quarters in which we outperformed expectations, as we continue to deliver on what we have previously communicated to our shareholders.

Speaker 2

We are filled with joy and excitement that our focus on our 3 main strategic objectives, disciplined capital allocation, purposeful growth and relentless improvement is yielding solid and consistent results. We will remain diligent through the execution of these strategic objectives and we will continue to find opportunities to maximize our platform and unlock value for our shareholders. For example, through relentless improvement, we are reengineering our approach to our supply chain strategy. The first phase of this strategy will broadly impact all merchandise options, resulting in elevated service delivery for our client families and increased savings from leveraging our scale. We expect to recognize some savings this year in a full Phase 1 impact in 2025.

Speaker 2

Phases 2 and 3 will follow and additional savings are expected. As a quick update, we continue searching for a CFO to help drive our long term strategic growth plan forward. While we have conducted multiple interviews, we have a very clear vision of what we need at this stage of our journey, as this critical role will be a catalyst towards value creation, invest in class financial planning. We look forward to reporting back once we fill this key position. In closing, we are pleased with our 2nd quarter performance and progress in executing our 5 year strategic objectives plan.

Speaker 2

With plenty of opportunities yet to materialize, we're excited about where we are in our journey. And with that, I will hand it over to Kathy.

Speaker 3

Thank you, Carlos. Thank you to all who are joining us on the call today. As Carlos mentioned, we increased our full year guidance given our strong operational performance for several quarters in a row. I will start by providing the cash flow and overhead highlights, then talk about what we can expect for the full year. Results for the quarter and year to date included adjusted free cash flow of $1,700,000 which was down slightly from the prior year quarter of 3,800,000 dollars However, we are ahead of prior year on a year to date basis at $22,600,000 versus $20,900,000 or $1,700,000 ahead.

Speaker 3

We recently amended our credit agreement, which shifted us from Bisbee to SOFR. We retained our credit facility capacity and will also have a more favorable fee schedule, resulting in near term interest expense reduction. The new agreement will also align the bank and financial leverage ratios resulting in a 4.58 times leverage ratio for the Q2 of 2024. This amendment demonstrates the strong partnership with our banks and their confidence in our performance and the opportunities that lie ahead for Carriage. Turning to our progress this year as it relates to capital expenditures, we continue to demonstrate our focus on disciplined capital allocation.

Speaker 3

Year to date, we have invested $7,100,000 back into our businesses through capital expenditures. Growth CapEx was $4,400,000 and maintenance CapEx was $2,700,000 year to date. Now shifting to overhead. Overhead was $20,400,000 for the quarter versus $12,100,000 in the prior year quarter, resulting in just over an $8,000,000 increase in overhead. The overhead variance was driven by a one time $5,000,000 expense related to the company's review of strategic alternatives.

Speaker 3

This is a notable G and A expense item driven by the last of the anticipated expenses relating to this review, which concluded earlier this year. You will note that it is a nonrecurring item and is reflected in our non GAAP add backs for adjusted EPS and adjusted consolidated EBITDA. However, for cash flow purposes, we anticipate the payment of the $5,000,000 to be spread evenly over the course of the next 12 months. Additionally, we had $1,000,000 relating to Project Trinity costs and $800,000 for executive severance, which was also a non GAAP add back in the period and lastly, dollars 400,000 of corporate short term incentive compensation expense driven by our strong performance. Overhead as a percent of revenue was 20% for the quarter.

Speaker 3

However, excluding strategic review costs and executive severance, overhead as a percent of revenue was 14.3% versus 12.4% in the prior year quarter. Now let's shift to what we can expect for the full year. Adjusted free cash flow for the full year will remain in the range of 55,000,000 to $65,000,000 Although we have increased revenue guidance as we grow our business organically, the growth is projected to be primarily driven by cemetery preneed sales, which are collected over time. We are expecting capital expenditures to land about $18,000,000 for the year, dollars 9,000,000 for growth CapEx and $9,000,000 for maintenance CapEx, which is slightly lower than our initial expectation. For overhead, as we continue to execute on our strategic objectives, we expect to experience slightly elevated overhead costs driven by Project Trinity.

Speaker 3

However, in the long term, as previously communicated, we anticipate overhead efficiencies after implementation is complete and after completion of other internal initiatives. We are targeting a leverage ratio of 4.5 times to 4 point 7 5 times for year end. And as I mentioned earlier, we are expecting to experience a reduction in interest expense of $400,000 to 600,000 for the rest of the year as a result of a more favorable fee schedule provided by the new credit facility amendment. That concludes my prepared remarks, and I will turn it back over to the operator to open for questions.

Operator

Thank you. We will now conduct a question and answer session. We'll take our first question from Alex Paris with Barrington Research. Your line is now open. Please go ahead.

Speaker 4

Thank you and good morning everybody.

Speaker 2

Good morning, Alex.

Speaker 4

I just wanted to congratulate you on another beat and the guidance raise, which we've been anticipating. So I have a couple of questions here that come to mind. First on funeral services, volumes were down 4.5% in the quarter, as expected generally because of the pull forward effect of COVID, largely offset by an increase in the average revenue per contract. Not too different than what the industry leader Service Corp announced last night they had an unexpected decline in volume, offset partially at least by average revenue per contract. So as I said, not a surprise, but particularly because you said on the last call that March April were a little weaker than January February.

Speaker 4

How should we think about funeral volumes in the second half? I'm presuming that we're still going to have the effect of pull forward and maybe some growth next year. Your thoughts?

Speaker 2

Absolutely, Alex. As we have shared in past calls, we still feel pretty strong about the trends. We believe Q3 and Q4 will continue to show a slight decrease on volumes from prior year. But to wash off pretty much by Q1 of 2025, the decrease will be slight. We should be able to continue to make up a big chunk of that volume loss through revenue increase through sales average.

Speaker 2

And so we feel pretty confident based on our current trends that we should be able to have a pretty decent Q3 and Q4 related to volume decrease.

Speaker 4

Got you. How did July go at this point? Said it another way, what was the trend during the the monthly trend during the quarter in terms of funeral volumes? Was it worsening? Was it lessening?

Speaker 4

And then the 1st month of this quarter?

Speaker 2

Slightly above last year on volume for July.

Speaker 4

Got you.

Speaker 2

So you can see, Alex, from July alone, we feel pretty encouraged that while we'll still expect a slight decrease overall for the Q3, we do see the balance of the year starting to level up from a comparable perspective on funeral home volume.

Speaker 4

So in keeping with that trend that maybe the 4th quarter volume decline would be less than the 3rd quarter volume decline. Is that reasonable?

Speaker 2

That's our expectation. Yes.

Speaker 4

Got you. Okay. And then specifically with regard to the interest rate on the variable debt, What was it in the quarter versus the year ago quarter?

Speaker 2

Specifically to our credit facility? Yes. I believe it's about I think you gave it last quarter.

Speaker 4

In Q1, you had said it was 8.9% versus 7.9% a year ago. I'm wondering those same numbers on a second quarter basis.

Speaker 2

Only a 100 basis point difference between Q2 of 2023 and Q2 of 2024.

Speaker 5

Okay. So

Speaker 4

a similar increase or

Speaker 2

was it Similar increase. Very slight increase. We've been very and it's not coming Alex, just to put some point of clarification, it's not coming from the rate itself. It's because we have decreased the size of our usage of the facility comparison to last year.

Speaker 4

Exactly. So interest expense was lower because you had less revolver debt outstanding, less variable rate debt outstanding. I think $154,000,000 at the end of the quarter versus $189,000,000 last year because you paid down debt there.

Speaker 2

That is correct.

Speaker 4

Okay, great. And then last and related question regarding the credit agreement. I think Kathy just mentioned that you would have $400,000 to $600,000 less in interest expense over Q3 and Q4. I think you extended the term. What other color can you give us on the amendment to the credit agreement?

Speaker 2

Yes, happy to share a lot of color on that. We achieved basically five things from our amendment to the credit facility. Number 1 was the allowance of up to 20% of EBITDA adjustments that resulted in aligning our financial and bank leverage ratios calculations. Number 2 is extending the term of the facility through 2029. Number 3 was a decrease of the rates by pretty much about 5.8 on tiers above 4.2 times, which we expect will be riding over the next probably year and a half.

Speaker 2

That will result in savings in short term interest expense. Also allows for M and A flexibility with a raise to the cap. As you remember, 4 was 4.25, now it's 4.5. So we have that flexibility moving forward. And it really reiterates the high level of confidence that the banks has encouraged.

Speaker 2

And so we're pretty excited about where we are with our priority facility amendments. So very positive result from that.

Speaker 4

Great. I appreciate those answers to my questions. I'll get back in the queue. That's all I have for now.

Operator

We'll move to our next question from Liam Burke with B. Riley. Your line is now open. Please go ahead.

Speaker 6

Thank you. Good morning,

Speaker 2

Carlos. Good morning, Ian.

Speaker 6

Carlos, the cremation margins were very high visavis even when in the past where they were mid-40s, and you posted a high-40s number here. Understanding that quarter to quarter, these margins bounce around, but what created that significantly?

Speaker 2

We have launched a strategy for our cremation families. And basically it has two fronts. 1 is an educational component to show all options to all families that are choosing cremation. This is related to, let's call them packages, but it is really a walk through of what's truly possible information. So as somebody walks in with a direct cremation idea, they may walk out with a reclamation service, reclamation with increased merchandise, reclamation with a live celebration or some sort of gathering.

Speaker 2

And that, of course, is increasing our sales average per contract on the cremation side. Our goal is to decrease the de reclamation impact from last year between 3% to 5%, so we'll have less reclamation and more reclamation with service, Sanofi Mccull. That has been a strategy rolled out pretty much throughout Q1 and really executed formally in Q2 across the field home portfolio and is making some significant impact. That's the biggest piece. The second part to that, it has been a strategic review to pricing on all of our merchandise and services product.

Speaker 2

That doesn't mean that we do a big increase across the company. It only means that we sit down with the managing partner with a lot of data analytics, so they can decide based on the trends on a 5 year basis, what is the best option to make up for pricing, including market share gains, including pricing of the competition, pricing for the businesses on the different categories for 5 years. And as they see all those trends, they make the most of the kind of decision that is more convenient for their business.

Speaker 6

On that note, did you see growth in both traditional burial and cremation contracts or just cremation?

Speaker 2

On sales average?

Speaker 6

No, just on the actual contracts.

Speaker 2

Oh, no. So, barrel rate is down a little bit, right? For the quarter, 1.8%. However, our commission rate is up 1.4%. And so we do continue to see that 1% to 2% trend that goes up and down to the quarters on an annual basis typically stays between 1% to 1.2%.

Speaker 2

But the strategy we're using to make up the loss of a higher average on the barrel side to a higher average on the commercial side is actually working really well as seen by our Q1 and Q2 performance.

Speaker 6

Great. And then lastly on cemetery margins, they were high 40s, which is pretty darn good. Again, quarter to quarter basis, they do vary, but why were they so significantly higher? Or can you keep doing it, I guess,

Speaker 2

is a better question? That's a great question. Yes, I wouldn't say they're sustainable over time. They're going to be on the high side between our Q1 and Q2. But we did have a spectacular Q2.

Speaker 2

And when you think about that, we did about $9,000,000 for large sales. We had Qingming, which in the specific case of Rolling Hills, our organization driven penny property marketing out of California had a spectacular Qingmin season and that really helped us drive these margins and this performance for the quarter. We do believe that because where we are in our sales painting cemetery journey or cleaning sales journey, we still have a lot of upside because we have not been close to maximize our platform and our communities and the opportunities that we have out there. And Shane Pudenz, our Senior Vice President of Sales and Marketing has done with the support to marketing an incredible job generating the leads that are giving these pretty high. And for this continuation of performance probably over the next 2 to 3 years at least.

Speaker 6

Great. Thank you, Carlos.

Speaker 2

You bet. Thank you so much, Gabe.

Operator

We'll move to our next question from John Franzreb with Sidoti and Company. Please go ahead.

Speaker 5

Good morning, everyone. Thanks for taking the questions. I have to start with your response to the previous question about cremation. I'm curious how much of that is the acceptance of other services and how much of that is maybe because cremation has a lower ASP that it's easier to raise prices in regards to increasing the value of those contracts?

Speaker 2

That's a great question. I appreciate that, John. So we just started to track when I say just about 2.5 months ago, beginning of the quarter really to really understand we have this switch from our current ERP system called CFS to Trinity. So CFS doesn't really allow us to do much information on that analytics, but we have some. So we were able to program the system to give us some data on this, let's call them for purpose of this call packages.

Speaker 2

So we can know how many families that come in with the idea of getting up to reclamation, they actually been upgraded to reclamation with something. Not enough data to actually me feel comfortable sharing on this call yet, but I will feel more comfortable as we close on the Q3 and now have Q2 and Q3 to compare as it is a quite new strategy for cremation consumer. So we'll give you more update on that, but it is very positive. It's a significant take up rate as that will be my expectation as per the average that we're seeing on the commission side.

Speaker 5

Makes sense, Carlos. Thank you. And in regards to your supply chain procurement review, you said Phase 1 is done or near done and you expect results by the Q4, if I heard properly. What kind of magnitude do you expect in the Phase 1 completion to impact the P and L?

Speaker 2

Absolutely. So we did the pre work to the Phase 1, right? Pre work meaning all the analytics around merchandise, specifically more around urns and caskets and other areas too to discover what was the size of the opportunity. So that work was completed. And now we launched the strategy on the first phase, which will be related to specifically diamonds, upgrades on diamonds.

Speaker 2

That's the creation of diamonds from permitted remains and earned strategy and vendor strategy. What that means is vendor agreements. It means the selection of core lines. It means creating the specific alignment of caskets, so our managing partners can choose to partner with those vendors at a better pricing than we ever had before because we are negotiating agreements with those vendors and get some additional benefit for carriage. On that front, just wave 1 or phase 1 of that supply chain strategy from now to the end of the year and we're in execution of phase 1 currently, we do expect to get somewhere between $450,000 to $700,000 in savings in order to benefit from this strategy by the end of Q4.

Speaker 2

And then we do expect for just Phase 1 somewhere around $2,000,000 in savings throughout 2025. Now as we go into Phase 2 and Phase 3, there's other elements on the merchandise, both indirect and direct procurement that will land somewhere around potentially an additional $5,000,000 over 20252026. Potentially more to come on that front as we continue to get deeper dives into the data and the opportunity, but it is quite an it's really longing a fruit that is there for us to capture today. And that's really the approach to at least the first phase and then Phase II and III through 2025 and 2026.

Speaker 5

That's certainly very impressive. And I guess one last question regarding the outlook and the expectation that the debt rate is going to continue to work against you in the second half of the year. But if I recall correctly, last year, we had a surprise September. So when we start thinking about the comps on a year over year basis, we should still have a positive comp maybe in the September quarter and then a negative comp in the December quarter. Am I thinking about that properly or not?

Speaker 2

Well, so if you go back even to 2022, we had quite a big drop on September 2022 and we were not expecting a second big drop on September specifically of 2023 and we have them both. For some reason September came lower than expected both years. I don't expect, again, especially out of the comment I made on July trends, for September to be such a big drop, I do expect that there would be at least comparable, if not an increase to 2023. And so that's really where we stand. But it was a surprise 'twenty two and it was a surprise 'twenty three.

Speaker 2

So it could be a surprise 'twenty four, but not expected. It could

Speaker 5

be a surprise. Okay. All right. Fair enough. Thank you.

Speaker 5

Thank you for taking my questions, everyone.

Speaker 1

Thank you, John.

Operator

We'll move to our next question from George Kelly with ROTH Capital Partners. Your line is now open.

Speaker 7

Hey, everyone. Thanks for taking my questions.

Speaker 2

Good morning, George.

Speaker 7

Good morning, Carlos. Maybe if we could start as kind of a follow-up to that previous answer that you gave on the merchandise, the different phases of opportunity that you see over the next 2 or 3 years. I guess the question is, are there other areas beyond merchandise sourcing? I don't know if it's potentially labor or other significant areas that you're also targeting? Or does merchandise kind of represent the biggest by far area of efficiency as you look out over the next, call it, 2 to 3 years?

Speaker 2

So merchandise is really the biggest bucket, but there are other opportunities we're looking at as of today. I'll give an example. We already moved from an internal audit team to an external audit team that is going to help us from that point of view. It's not big savings, but these are top strategies we're implementing. Additionally, we are actually going to fully centralize accounts payable through our new system Trinity, effectively January 1, 2025, which should result in some additional savings.

Speaker 2

We are leveraging our scale on all technology, telephony, mobile phones, that type of thing. So it's very, very holistic approach. We have not been able to put a specific number to every single category. And where we're close to, we have enough data. We just don't want to commit to it just yet.

Speaker 2

We need to do a little bit more work on cleaning up that data up to make sure that it is, receivable and achievable. But there is significant opportunity on that will come out of this supply chain procurement strategy as we move into the rest of the year and then over the next few years through 2026.

Speaker 7

So is it fair to say then that getting back to a consistent 40 plus maybe call it low 40% funeral EBITDA margin is a very realistic situation just as you look out over the next 2 years?

Speaker 2

Well, so really great question. As you know, we're close to that right now, right? But that's been a result of a couple of things, catching up to the inflation cost of specifically on utilities, labor, transportation that we have experienced over the last couple of years, And we're still doing some catching up on that front. So that get us closer to that goal. Additionally, from the revenue side, the sales average per contract making a significant impact, making up for that slight loss of volume.

Speaker 2

But where we're really encouraged is once we get the volume back on track, right? Once we wash off of this pull forward effect and we're able to be on a comparable basis, as we continue to deliver the strategies on supply chain that I just mentioned, continue to work on our pricing strategy and on the reclamation improvement for upgrading that consumer, we do feel pretty strong that the revenue will continue to grow and that the margin should be expanding to that 40%. But that will be probably 2025. I don't expect to get us to 40% right through maybe Q4, but there's not an expectation just yet.

Speaker 7

Okay. That's helpful. And then two last quick ones for me. Are there still more non core assets that are under consideration for sale? And then second question is on pricing back to your funeral business.

Speaker 7

Thinking about next year, your commentary about volumes was helpful just about your anticipation for volumes to turn positive maybe this year, at the end of the year, but most likely early next year. And I guess the question is just on pricing. Are you anticipating continuing to take pricing? Or do you think you're getting kind of close to hitting a ceiling there and it will go back to kind of flattish or just slightly positive for next year?

Speaker 2

I feel confident that we will continue our pricing strategy throughout Q3 and Q4. We have quarterly meetings through our regional partners and the directors of operations with our managing partners to review where we are. We can suddenly just go 10% increase across the board. So it's been slowly but surely because we want to balance the price increase with volume, right? We don't want to lose volume and lose our ability to compete.

Speaker 2

And so we're kind of like trying to see where the demand meets at perfect pricing to continue to increase volume and gain market share if possible, which is what we've been doing. But I do expect for those meetings to continue Q3, Q4 with some improvements, maybe not as big as we have done so far on pricing, but continue to be up maybe 100 to 200 basis points by Q4. And as it relates to your question on the divestitures, I'm going to ask Steve to answer the question.

Speaker 1

Good morning, George. Yes, so for divestitures, we've already closed a couple of deals earlier this year for a little more than $11,000,000 in proceeds.

Speaker 2

We're looking at a

Speaker 1

couple of other opportunities. The good news for us is while they are non core assets, they're still profitable businesses. So really kind of making sure that the premium we get is significant enough to where it makes sense for us, but we have several opportunities we're looking at. Secondary category, where we've got some momentum is excess real estate. We like that because we're not losing any EBITDA, but we do have some excess land that is not in our plans for future development in some prime locations.

Speaker 1

So as we look ahead to the end of the year, we think there's a good opportunity potentially to get between $20,000,000 $30,000,000 with relatively low EBITDA loss on that. So we'll have more to report next quarter, but it's progressing well so far.

Speaker 7

Wow, that's significant. Okay. I appreciate all the color. Have a good one.

Speaker 2

George, just to add a little bit more on that one. Our plan is as we continue to work on those divestitures and we do feel we will be able to execute on some before the end of the year. It is important to highlight that we have paid down $60,000,000 compared to a year ago from the peak of our credit facility and that's very significant. That's about 0.79 turns in just about a year right on our plan with delivering. And as we find this type of opportunities from a divestiture front, we'll continue to accelerate that commitment to paying down our debt.

Speaker 2

And as you have seen, we'll see some savings from our credit facility amendment and potentially some expected savings as the Fed does execute on September potentially. So very excited about our journey, about our financial position, about the execution of our plan as

Operator

of right now. It appears there are no further questions at this time. I'd like to turn the conference back over for any additional or closing remarks.

Speaker 2

Thank you everybody for joining our call. The future at Carriage is full of opportunity and excitement, and we are filled with great enthusiasm. Our ongoing strategic initiatives and progress over the past year place us in a strong position for continued innovation and financial growth. Our focus extends beyond immediate successes. We are laying the foundation for enduring value that benefits our shareholders for the long term.

Speaker 2

Thank you for your interest and support, and we look forward to reporting our progress on our next call.

Powered by Quartr
Earnings Conference Call
Cadrenal Therapeutics Q2 2024
00:00 / 00:00