Kian Granmayeh: So we feel comfortable landing within that kind of 4.75 to 5 times range. We’ve kind of done our model analysis and kind of looked at the scenarios. And just based on various factors on performance, and Steve mentioned the potential divestitures of noncore assets, we’re going to land comfortably within that 4.75 to 5 times range.
Alex Paris: And then I think a longer-term target is 3.5% to 4%. When do you expect to kind of fall within that range at the end of 2025 or do you have a target?
Kian Granmayeh: So as we just kind of look at our next milestones, as we look at kind of year-end ’25, the next milestone for us is getting to 4.5 times, where interest rate spread decreased significantly by 125 basis points and then getting down to 4.25 times where we can kind of get back into acquisition mode. And we kind of anticipate getting into that level by the back half of 2025. And then getting kind of below that 4 times is probably as we turn the corner going into 2026 is when we kind of realistically expect to kind of get to that level.
Operator: We’ll go next to Liam Burke with B. Riley.
Liam Burke: I just need a clarification on an earlier question. On Funeral Home, you had contract revenue for burial up 3.5% and contract revenue for cremation up 4.5%?
Carlos Quezada: 3.2% on burial, 4.5% on cremation.
Liam Burke: And that’s on a year-over-year basis, okay?
Carlos Quezada: Yes.
Liam Burke: Hopping over to your momentum in preneed sales, have you fully staffed the sales force? Or can we expect further build out an additional momentum here?
Carlos Quezada: I believe we’ll continue to experience sustainable momentum throughout the year. You have higher months than others. As you know, Qingming, which is a huge Asian celebration, starts in March, continues through April, and then you have summer, which are a little bit more difficult due to the summer vacation time, a lot of families are not home. But over on a year-over-year basis, we should be able to continue to experience significant growth on bringing cemetery sales, including property and merchandise services. They have done an incredible job. We saw a little bit of momentum middle year last year, mainly because we upgraded a few of our sales leadership in the cemeteries that took place last year, the development of those leaders, the activity leading up to the level of activity we need to deliver this type of sales have been in place since then.
And the strategy and plan to continue this momentum is in place. So we feel very encouraged that between the leadership team we have in place, led by Shane Putin, in addition to our CRM and marketing efforts for regeneration will continue to grow over the next few quarters.
Liam Burke: And going back to acquisitions. I know you stated that where your leverage level would be where you’d be comfortable to ramp up acquisitions. But is there anything that you would see over the transom between now and then?
Kian Granmayeh: I mean actually timely. So we just spent some time last week with a business that we’re interested in partnering with when the time is right. And so just keeping those relationships active, is important to us and a key focus that we continue to look at while we continue to pay down our debt. So we keep those conversations flowing and make sure that people are up to date on where carriage is, and we’ll continue to do that until we get to 4.25.
Operator: We’ll go next to George Kelly with ROTH MKM.
George Kelly: I’ll start with just a quick follow-up to the comments in the prepared remarks. And then I think there was a question earlier, but just a follow-up on the trend you saw in volume through the quarter. I’m curious if you could comment on what you’ve seen so far in April? And then secondly, same topic is, if you were to compare the January and February volume growth that you saw with March, I think you said it turned negative in March. I’m just curious how great that difference was between sort of where you started and where you ended the quarter?
Carlos Quezada: It was about 200 basis point variance between January, February and then compare that to March, which is within the range, and it just that March happens to be a very large month for us, typically coming from preneed cemetery sells. So we made up some of it through it, but from a funeral volume perspective, it was enough for us to kind of like pay attention. As it relates to your question on April, it remains on the same line. The really good news is that our efforts on enhancement to our pricing strategy continues to deliver great momentum, and we continue to have that ability to make up, if not all, a significant amount of that decline in volume. That, in addition to our continued integration of our most recent acquisition, which is Greenlawn, which, as you know, have three funeral homes that are continuing to perform better and better as we continue to integrate them into our company.
George Kelly: And then next question is on the four wall the pricing and cost efficiency measures that you’re sort of working through the system. I’m curious with respect to each one, if you were to take pricing on one side and cost efficiencies on the four wall and the funeral side, like what inning are you in, in each of those initiatives?
Carlos Quezada: So even though we had a very significant bump on pricing in December and then now reflected on our first quarter of this year. We just launched in last month really, what it is our new strategic pricing review, which is going to be reviewed by business on a quarterly basis. And the intention of this review is not to increase price just for the sake of increasing price. It is to have a conversation with our leaders in the field who know best the communities, the competition, the right pricing for the businesses and, of course, what type of merchandise they need to be selling. However, the review does have a significant amount of information that in reflection to the performance of the previous month or quarter should be able to lead them to best decisions.
And also, it’s not just about price increase. It’s about strategies to continue to present better to families, presenting all options to every single family so that I can have a very comprehensive and customized life of celebration to each one of their loans. And so it’s a combination of the 2, right, strategic review process, through a very thoughtful data analytic process, plus how can we become better at presenting the families to elevate our average revenue per contract. That’s on the pricing side. Yes. As it relates to cost, which was the second part of your question, we have been able to do a lot of good work in getting our costs down. We have mentioned in the past that some of the things we want to do with Carriage is find that fine balance between the Empower partnership as per our purpose statement and decentralization and our ability to maximize our scale.
