John Ransom: Great. And just another, this may be a little too wonky, but you talked about the 10% CAGR in funeral volumes since 2019. What do you think — what’s the M&A effect of that? So if you hadn’t had any M&A, what do you think the funeral CAGR would have been from 2019 to 2023? Is that about point a year? Is that the easy way to think about it?
Thomas Ryan: Yes. I think it’s fair to say that maybe 3% to 4% of that is acquisition and the rest of its organic.
John Ransom: Right. So therefore, 6% growth. So a little over 1% a year CAGR. So that’s not crazy. So I guess that underscores, we probably are at the tag end of the COVID pull forward. And so you think that ’25, you’ll get some small growth, kind of go from maybe minus low single digit in ’24 to up low single digit in ’25 for funeral. Is that a fair way to think about it?
Thomas Ryan: That’s kind of our expectation right now, John, yes.
John Ransom: Okay. And then just two last ones. Any early read on Ching Ming, the weather? I hate to talk about the weather again, but you know.
Thomas Ryan: I think one of the things to understand about the weather from last year, last year, the real problem was we had — we basically had inventory that was destroyed. And by destroying potential inventory, it delayed any possibility of sale for a matter of months until you could get that inventory repurposed. And that in the range where again this year, to our knowledge, we have not had any kind of event like that. So while you may have had a few days out of the market, I think it’s our belief that the customers are there and we’ll get in front of them, and we’ve got great inventory to show our customer base. So yes, we don’t anticipate as pronounced an effect as we had last year because of the weather.
John Ransom: You guys would put tarps in the CapEx budget this year for Blue Tarps?
Thomas Ryan: We did.
John Ransom: Okay. All right. And then lastly, we correlated your preneed cemetery to a basket of consumer stocks, and it was pretty close in the third quarter, but you definitely outperformed kind of the basket of comps that we thought correlated. So we got to get back to work on that. But why do you think even in the face of not great consumer comps and not great funeral volume, what do you think led to the outperformance in cemetery preneed to the fourth quarter?
Thomas Ryan: Sometimes, John, it’s a matter of timing. But I think, again, I give the credit to our sales force, to give the credit to our inventory teams. We’ve got a fabulous inventory to sell to the best sales force in the world. So I give the credit where credit is due.
John Ransom: What’s the size of your sales force now?
Thomas Ryan: We’re about now 3,700, 3,800 salespeople, down from, I think, pre-COVID 4,300. So we’re able to —
John Ransom: Are you up off the bottom though? You’ve had the people from the bottom, the post COVID bottom?
Thomas Ryan: You know, actually, we’re about the same. I mean maybe up slightly, but I’d say we kind of adapted during COVID to 15% less headcount. And you see the results, we’ve got compounded growth rates at around 10%. So very efficient throughput, great use of technology, great leadership.
John Ransom: Okay, thanks so much.
Thomas Ryan: Thanks, John.
Operator: The next question comes from Scott Schneeberger of Oppenheimer. Please go ahead.
Scott Schneeberger: Thanks very much. Good morning. Guys, on preneed cemetery, it sounds like you’re getting a lot of nice pricing. You’ve developed a lot of nice products. And it seems like that’s going to be the growth driver. I’m curious about contract velocity. Is that going to remain negative in 2024 and to what magnitude? And I’ll follow up with something on that. But just if you could address that, please.
Thomas Ryan: Sure, Scott. I think if you take a year, as an example, our velocity, again, is slightly flat for the fourth quarter this year. But if you go back to 2019 levels on a year-over-year basis, we’re actually up in velocity 11%. So I think sometimes we get so caught up and this velocity has got, I believe we flattened out. I think velocity should now correlate a little better to flat to slightly grow as we think about future. And so if you got 1% to 2% in velocity and you got 4% to 5% in pricing, that’s probably the way to think about what we can do in cemetery sales as we munch forward over the next few years. So yes, I would anticipate that, that stabilizes from here and continues to grow off this 11% growth from 2019 levels that we are operating in today.
Scott Schneeberger: Thanks. And on — still on preneed cemetery, kind of a two-parter. Just how would you qualify consumer behavior kind of low end, mid, high end of the range? And then the follow-up question on that is cemetery margin in 2024. Just your thoughts there? Thanks.
Thomas Ryan: Yes. So I think on consumer behavior, if you take the high end, we continue to see the high end going strong. And some of that average price and remember, these are over $80,000 sales. But to give you some perspective, we probably had about 400 of those that averaged around, call it, $200,000 sale, back in 2019, around that era. We’ve almost doubled the number of contracts. So going from 400 contracts at that level to 800, slightly up on the average too. And so that seems some pretty significant growth and continues to look strong. And again, we’ve always said that probably correlates best with housing and stock market. And I’d say if there’s anywhere we’re not seeing as robust in activities we like, it is at that lower end.
