With the advent of increased private equity ownership in the Death Care business there are not a lot of public companies to draw information from that you can compare with your own funeral home.  Quite frankly, the only two public companies where I seem able to find “comparable information” with locally owned funeral firms are Service Corporation International (SCI) and Carriage Services.

Interestingly, in the past couple of weeks both of those companies and Death Care supplier Matthews International were all in the news for various reasons.  Here’s a short synopsis of why.

First of all, SCI was involved as a participant at the Bank of America Leverage Finance Conference.  They were represented there by Senior Vice-President and Treasurer Aaron Foley who took part in a question and answer period with Bank of America Securities Larry Bland.  You can read a full transcript of the Q & A here from Seeking Alpha.

There is a lot of information for people interested in Death Care business in the Q & A.  I’ll note three items I found somewhat interesting and pretty much on trend with what I’ve heard around the profession in the past year.

• Cemeteries have great opportunities going ahead.  There is a market for “Premium Memorialization”.  Here’s what SCI’s Aaron Foley said about that issue:  “Cemetery side has continue(d) to be strong as well. We — as I know that we’ll talk about later, have a dynamic within our pre-need cemetery sales that has large sale dynamics but a core consumer dynamic as well. . . . . . But those large sales make up about 10% to 15% of our total cemetery preneed sales. And we’ve got teams out there that are constantly driving and trying to grow that.”  (Editor’s Note:  SCI considers sales of $80,000 and over Large Sales”

• The Pull-Forward effect on pandemic deaths has probably caught up and we have reached normalcy for death rates.  Here’s what SCI’s Foley said about that in the Q&A:  “I think where we stand today, it seems that, that has all kind of normalized out. . . . . .As we began our 2025 planning, we came out of this expectation after having seen in ’22, a decline of volume of 6% in ’23, 4% in ’24, we were down 2.5%. We expected 2025 to be about flat to slightly down. . . . . So seeing all those trends together kind of gives me some heart to say, I feel like we’re kind of at this normalized trend now for volume.”

• Cremation Growth has started to moderate.  Here’s what SCI’s Foley said on that dynamic in the Q&A:  “And where we stand at this 58% or so type cremation mix, when we’ve looked at other kind of Western cultures where the cremation mix has seemed to stabilize, that’s around that 70% to 80% type range. And so as we get closer to that, you would expect that, that slope should start moderating. But then when you look at a lot of the cities and urban areas that we do operate in the top 10 or 15, there’s a good chunk of those that are already kind of at or near that 70% to 80% type range. And so we’re expecting less of a pressure from that (growth of cremation) front going forward.”

Matthews International has sold their Warehouse Automation Business for $230 million.  As you may know, Matthews International operates in different business segments, with the largest, by revenue, segment its Memorialization Segment.  That segment consists of its Matthews Aurora business, The Dodge Company business, and businesses in the cremation and cemetery categories.

According to this information from Globe Newswire, “The proceeds from the transaction, net of taxes and transaction costs, will be primarily used to significantly reduce outstanding debt, further strengthening the Company’s balance sheet and enhancing its capacity to pursue future strategic initiatives.” 

Again, according to the press release, “The Warehouse Automation business generated sales of $72 million for fiscal 2025.”

If you follow the public stocks it is hard not to notice that Carriage Services has been on a deliberate plan to modernize not only their businesses but also their business plan and strategic outlook going forward.  It appears that what they are doing is being noticed not only by those of us in the Death Care business world but those who rate credit as well.

According to this note, S&P Global has elevated the Carriage Services to a B+ credit rating from a B rating.  S&P Global notes this upgrade is reflective of continued operational improvement and an anticipation of lower leverage going forward.

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“A servant’s attitude guided by Christ leads to a significant life”

Seeking Alpha author Daniel Jones made the following comment in this opinion article titled “Carriage Services is coming back to life” published last week about the company:

“. . . I believe that the market is currently underestimating Carriage Services. The business has done a fine job of reorienting itself over the last couple of years, and it clearly is back in growth mode. . “

As is Funeral Director Daily’s policy for financial opinion articles, we will link the article and show some quotes on the article but let the reader make their own decisions as to the opinions given.

Jones makes the following claims at the beginning of the article about Carriage Services:

• “Carriage Services remains deeply undervalued, with strong top-line growth and demographic tailwinds positioning it for long-term success.”
• “CSV’s recent acquisitions and expansion into new markets signal a return to ‘growth mode’ after significant debt reduction and strategic review.”
• “Despite mixed profitability in recent years, 2025 guidance points to higher revenue, improved adjusted earnings, and attractive valuation versus peers.”

Funeral Director Daily will also provide these interesting graphics that accompanied the article for your knowledge:

The continued high fragmentation of the industry allows for more consolidation

America’s aging population creates tailwinds for Death Care providers

Carriage Services location map (As of December 31, 2024)

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”

National funeral home and cemetery operator Carriage Services announced their 3rd Quarter results last week.  In total they announced total revenues of $102.7 million in revenues for the 3rd Quarter in comparison to the 2024 3rd Quarter of $100.7 million — that’s a 2% total increase.  The same report also stated that the company’s revenue for the 9 month period ending September 30, 2025, totaled $312.0 million as compared to the total revenue for the same 9-month period of 2024 of $306.5 million — that’s an increase of about 1.8% on the year so far.

That doesn’t tell the whole story, however, as the press release from Carriage Services, which you can access here, alludes to how strong the cemetery and preneed operations of the company have been.  Here’s a couple of bullet points from the press release that points to that fact:

• Total revenue grew 2.0% over the prior year quarter, driven by increased operating revenue of 5.2% primarily as a result of 21.4% growth in cemetery preneed sales;
• Cemetery operating revenue increased 12.6% over the prior year quarter, driven by a 4.6% increase in the number of preneed interment rights sold and a 15.1% increase in the average price of preneed interment rights sold
• Financial revenue increased 27.2% over the prior year quarter, primarily driven by a 27.9% increase in preneed insurance contracts sold resulting in an increase in general agency commission revenue

On the other side of the equation, funerals, I noticed that the number of funeral contracts slipped about 2% over the same 3-month (3Q) period of last year and the increase in Funeral Revenue per case was less than 1% coming in at increased revenue rate of 0.7%.  The low rate of funeral contract revenue growth makes sense when you also notice the company’s rate of cremation to burial also slightly increased for the 3Q period. . . . . Carriage Services reported a 3Q25 cremation rate of 61% as compared to a 3Q24 cremation rate of 60.4%.

Carriage Services Vice-Chairman and CEO Carlos Quezada summed up the quarter with some prepared remarks in the press release.  In part, Quezada made these comments:

“We are excited to be back in growth mode, expanding our footprint this quarter through strategic acquisitions of businesses that served over 2,600 families and generated more than $15 million in annual revenue last year. At the same time, we divested certain non-core assets to reallocate capital towards better long-term value creation opportunities.

Total operating revenue grew 5.2% year-over-year, driven by 21.4% growth in cemetery preneed sales combined with financial revenue growth of 27.2%, reflecting the continued success of our national prearranged funeral and cemetery strategy. These results highlight the strength of our team, the effectiveness of our business strategy, and the growing demand for the premier experiences we deliver. Purposeful Growth in Action – Building Momentum Toward Our 2030 Vision.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Carriage Services management has been upfront in the past couple of years letting shareholders know that they re-allocating the assets of the business to set up greater success in the future.  They have sold some business units and acquired others — which in some areas makes comparable financial data hard to interpret without knowing what has been sold and acquired.

However, from the success of their cemetery segment and this knowledge that their new preneed agreements seem to be bringing more revenue to the bottom line, I conclude that they seem to be on the right track.

From my point of view, the consumer rarely stands still and it appears to me that part of the Carriage Services’ management goal is to be ahead of the curve for that consumer and have the right products ready for tomorrow’s consumers.  It’s an ongoing task that could pay big dividends in the future.

Disclaimer —  The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”

It’s been pretty easy to recognize that the management team that replaced founder and long-time CEO Melvin Payne at Carriage Services has been building the foundations of the business in order to begin once again making acquisitions for growth.  That has probably been a necessary strategy but it also was noted by some investors that if they wanted to grow, then they would have to get back into the acquisition mode soon.

Well. . . .those investors should be happy now as earlier this week Carriage Services announced that they had made an acquisition of one of the larger Death Care operators in Central Florida.  In this press release Carriage Services broke the news that they would be acquiring the assets of a group of providers I’ll refer to as the “Osceola” group.

The press release describes that group of businesses as such: “a combination business with a funeral home located on a cemetery, five stand-alone funeral homes, a crematory and central care center, and a cremation focused business, located in the growing Orlando, Florida metro market.” 

Steve Metzger, President of Carriage Services had this prepared remark about those businesses from the press release, “Osceola is a truly unique collection of businesses with an incredible team. . . . . we look forward to growing with the Osceola team in the years ahead.”

And, in a statement that seems somewhat directed at those that thought Carriage Services might be waiting too long to start in acquisition mode again, Vice-Chairman and CEO of Carriage Services Carlos Quezada made this comment, “We are thrilled to reengage in acquisitions as part of our long-term growth strategy. This milestone marks the first step toward realizing our 2030 Vision and reinforces our commitment to purposeful growth.”

Related —  Here is the website for Osceola Memory Gardens, a part of the recent acquisition.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I’ve been waiting for Carriage Services to make an announcement on an acquisition.  However, I have no issue with the timing and process of, seemingly, getting the ship in prime sailing form before setting out from the dock.  I believe that the management team at Carriage Services is being very methodical and strategic as they go about setting the right foundation not only with business sizing, but with their preneed decisions and their preferred vendors as well.

In business, I’ve always thought that a long-term strategy and the ability to follow that strategy is better than taking a swing at every pitch that comes one’s way.  And, it is my opinion that is the direction that this management team is taking.

Disclosure —  The author of this article for Funeral Director Daily is a shareholder in Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”

A recent opinion article from Seeking Alpha author Lighting Rock Research concludes that “After two years of deleveraging and portfolio optimization, I think this is a turning point for Carriage Services to pursue acquisitions and grow its core funeral and cemetery businesses.”

Here are a couple of bullet points from the article whereby the author thinks Carriage Services is on an upswing.

• “(Carriage Services is) reflecting stable growth and a turning point after two years of deleveraging.”
• “Carriage’s preneed cemetery strategy and normalized growth post-pandemic support steady cash flow and future profitability.”
• “Balance sheet improvements position the company for strategic M&A, with forecasts of 4% organic revenue growth and incremental margin expansion.”

One dissenting bullet point by the author is such:

• “Key Carriage Services risks include leadership transition, competition from low-cost providers, and the need to further reduce high-cost debt.”

Here are some more bullet points from the article, which you can access here:

• “Carriage Services operates 159 funeral homes and 28 cemeteries in the U.S. market, making it a small competitor to Service Corporation International (SCI). The company has recently focused on debt repayment and optimizing its overall portfolios.”.
• “Carriage Services has generated stable growth over the past years, with a 6% revenue growth and 7.1% adjusted EPS growth.”
• “The key message for the quarter was that the company’s business is back on track after two years of debt repayment and divesting non-core business units.”

Comparisons with SCI —-

The article by Lighting Rock Research was published shortly after Carriage Services 2nd Quarter financial reports.  Lightning Rock Research also published an article shortly after the 2nd Quarter financial report of Service Corporation International.  You can access Funeral Director Daily’s coverage of that article here.

What is interesting about those two articles by the same author is that you can make comparisons on two companies in the Death Care retail business and look for similarities and differences.  For whatever reason, Lightning Rock Research sees, as a percentage, future revenue growth higher with SCI than Carriage.  The Revenue Growth Rate projections as shown on the charts below indicate a slightly over 6% annual rate for SCI and a slightly under 6% annual rate for Carriage Services.

When it comes to Earnings Per Share, the researcher postulates in his projections that SCI will almost triple its profits in the next decade while maintaining that Carriage Services will slightly more than double their Earnings Per Share over the same time period.  At first thought that difference could be seen as SCI using their economies of scale to increase profits. . . . Or, it could be that the author believes that cemeteries will be more profitable than funeral homes over that time period as SCI operates the higher percentage of cemeteries of the two entities.

Here are some charts where you can find some comparative numbers between SCI and Carriage Services that were provided in the articles by Lighting Rock Research:

Current Numbers taken from 10-k report as reported by LIghting Rock Research.  (FCF=Free Cash Flow)

Carriage Services 10-Year Projections from Lighting Rock Research:

Carriage Services Ten-Year Forecast by Lighting Rock Research

Service Corporation International 10-Year Projections from Lighting Rock Research:

Projections of SCI’s Revenue, Operating Profits, Net Profits, and more through 2034 by Lighting Rock Research

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I always caution myself that when I look at financial reports that the numbers are “one-point, stationary-in-time” numbers.  It is my opinion that to get a good feel on the direction of a company you need to look at “trends over time”.

However, these two fairly current articles by the same researcher give us some type of feel as to how that researcher sees the companies from his point of view.

One difference I have with the research is his opinion that his viewpoint that one risk with Carriage Services is “leadership transition”.  The  founding of the company and the 30-year leadership of Melvin Payne can not be diminished, however, I think that leadership team of the past two years is now in place and will be a strength of Carriage Services moving forward rather than a potential weakness.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of both Carriage Services and Service Corporation International.

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“A servant’s attitude guided by Christ leads to a significant life”

Funeral Director Daily published this article about 17 months ago that was headlined “Carriage Services’ Mel Payne transitions to advisory role at company”.   The article went on to say that Mr. Payne, who was the founder, Chairman, and CEO of Carriage Services had been in those positions since 1991.

If you have watched Carriage Services since the time of that article 17 months ago you would notice that the leadership team of Carlos Quezada, John Enright, and Steve Metzger have been, in my words, “putting the house in order“.  It appears that in the last year and a half the leadership team has been busy building partnerships with suppliers, strategically reducing debt, and selectively divesting of funeral homes and cemeteries that don’t seem to fit the company’s criteria.

One of the criticisms of Carriage Services in that time of adjustment has been that some in the investment community have not had the patience that the management team has had about future acquisitions to grow the company.  The 2nd Quarter 2025 report, that you can read here, should quiet that group down as in the report Carriage Vice-Chairman and CEO Carlos Quezada made this prepared comment, “. . . .we are excited to announce that we are under contract to acquire new businesses, which we anticipate will close this quarter. Combined, these premier locations served more than 2,600 families and generated more than $15 million in revenue last year. We are excited to return to our long-term strategy of adding shareholder value through high-quality acquisitions.”

The financial results for the quarter for Carriage Services show Total Revenue slightly down — from $102.3 million in 2Q24 to $102.1 million in 2Q24.  However, if you deduct a $2 million revenue figure in 2Q24 for “Divestment” Revenue, then Total Revenue would be up about 2%.

For the first-half of 2025 Total Revenue came in at $209.2 million . . slightly up from the first-half of 2024 where Total Revenue came in at $205.8 million.  Again, the 2025 revenue number would is more impressive when you consider that one-time “Divestment” revenue from the first-half of 2024 is about $3.3 million greater than the same category in 2025.

When it comes to Net Income from Consolidated Operations Carriage Services 2Q25 number in that category came in at $11.7 million as compared to the 2Q24 number of $6.2 million. For the first 6-months of 2025 Carriage showed a Net Income of $32.6 million as compared to the 2024 Net Income for the same period of $13.2 million.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  What do they say?  Patience is a virtue?  I think that this report continues to illustrate how the management team at Carriage Services has a plan and are executing on that plan.  And, they believe in what they are doing.

From my point of view, as an outsider but also as an individual stockholder, I can visualize the plan.  To me, it appears that the management team has analyzed the company’s situation and are taking the steps to make it better.  I see a management team that values “quality” over “quantity”.  In June of 2024 Carriage Services stated that they had 165 funeral homes and 31 cemeteries under their umbrella.  In this latest report they have stated that they have 159 funeral homes and 28 cemeteries — that’s almost a 5% reduction in number of facilities.

So, there has been some divestitures of properties for some reason.  Maybe because of underperformance, or maybe a facility was not located in the geographical sphere that the group wants to be in, or maybe the facility was not located in a demographically advantageous area.  Whatever the reason, one number that I ascertain from that is that even with about 5% less facilities the revenue numbers between 2Q24 and 2Q25 are almost equal.

One conclusion to that mathematical equation could be that Carriage Services must be getting, on average, more revenue per location which can only be a positive in my eyes.  And, if you are gaining revenue per location that beats the alternative and one can be hopeful that Carriage can duplicate that feat with the new acquisitions they are pursuing.

Disclaimer —  The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”

About ten days ago this article appeared on investor site Seeking Alpha authored by Caffital Research.  The article was about funeral home/crematory/cemetery operator Carriage Services.  The title of the article was “Carriage Services:  Further upside requires further M&A.”

In that article the author(s) stated “Carriage Services, Inc. has still been quiet on the M&A front. The funeral home and cemetery operator has moderated its debt through non-core asset divestments and by using internal cash flow on debt payments, creating a better financial position for further acquisitions. Yet, such transactions haven’t been announced so far. Carriage Services’ own operations remain stable.”

The writer(s) did make this statement about Carriage Services operation without comment to the M&A levels, “As can be expected, Carriage Services’ own performance has stayed quite stable. The first quarter showed total revenues of $107.1 million, up by 3.5% year-on-year. Consolidated adjusted EBITDA came in at $32.9 million, showing strong leverage from $27.0 million a year ago. Both revenues and the adjusted EPS beat Wall Street’s consensus.”

Finally, the article made this comment, “The Q1 earnings call still reiterated the point that Carriage Services is looking at acquisition candidates, and noted that the company is already in discussions with a number of owners. The notations suggest that Carriage Services may finally return to acquisitions in the latter parts of 2025. The lack of transactions in 2025 so far has still been disappointing and somewhat lowers my expectations of Carriage Services’ future M&A pace, though.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily:  As is my general position, I’m not going to comment on the researcher’s opinions.  I’ll leave that up to each of you.  However, I did want to look back on the company’s 1st Quarter Earnings Call, which you can access here, to see what exactly was said about acquisitions.

Here’s the comment I believe Caffital Research is alluding to about “looking at acquisitions”.  It comes from Carriage Services’ Chief Financial Officer John Enwright in an answer to an analyst’s question:

“Yes. So we are talking to a number of owners right now. And again, just kind of going back, when you think about those 16 months and $38 million of proceeds, we do intend to reinvest some of those in higher-quality EBITDA producing businesses and expect to be able to share more about that in Q3 and then again in Q4 as well. So back half of this year, there will be more to report there, but excited to be able to add acquisitions back to the value creation story for Carriage.” 

Disclosure — The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”

I read, watch, and listen about what is happening in the Death Care business.  I do that on an overall scale and I also do it with as many individual companies as possible.

Over the last couple of years as I have read, watched, and listened to items concerning funeral home and cemetery consolidator and operator Carriage Services I get a sense that management is positioning the company to move forward.  I get that sense because it appears to me that Carriage Services is getting their debt in line, is getting their rooftops in line, and positioning their company with the vendors they want to be doing business with in the future.

For instance in the recent report on the company’s 1st Quarter of 2025, which you can access here, they mentioned that they lowered their debt by $17.0 million and they announced that they had divested of assets which returned proceeds of $18.7 million to the company coffers. . . . . And, the impressive thing is that while working on those strategic situations they brought in more funeral services and revenue than they did in the comparative 1st Quarter of 2024.

Tom Anderson
Funeral Director Daily

The company reported Total Revenue of $ 107.1 million for 1Q2025 as compared to Total Revenue of $ 103.5 million in 1Q2024 — that’s an increase of about 3.5%.  The company’s quarterly funeral contracts were listed at 12,055 as compared to last year’s First Quarter contracts of 11,773 — that’s an increase of 2.4% and I believe it was done without any large acquisitions.

It was also interesting to me to note that Carriage Services and Service Corporation International both reported 1st Quarter 2025 results last week and in many areas had common results.  One that I noticed was a category which they call “Comparable Funeral Home Results”.  Here is a small table I put together which gives, in percentages, the increases for Revenue, Services Volume, and Revenue per Service for that category.  The percentages indicate the increase over the same three-month period of 2024.

Comparable Funeral Home category results
1st QTR 2025

While Carriage Services and SCI both operate on national scales, this comparison does give you something to compare your locations to.  Both companies combined to increase services coupled with a Revenue per Service increase to increase the Total Revenue.  I believe that is an approach that needs to be met in higher than normal inflationary times.

As far as Carriage Services’ performance for the quarter, here’s what CEO Carlos Quezada had to say in prepared statements in the 1Q25 press release last week, “. . . .Our solid financial performance, highlighted by a 4.6% increase in comparable funeral home revenue was primarily driven by a 2.4% increase in funeral home at-need volume and a 2.2% increase in average revenue per at-need contract. . . . .Through continued investments in innovation, the expansion of key partnerships, and the empowerment of our people, we are building the Carriage of the future.”

Here’s a couple other metrics from Carriage Services’ quarterly report:

• Cremation Rate:  Jumped to 60.5% as compared to 59.3% in 1Q2024

• Average Revenue per Funeral Contract:  Jumped to $ 5,731 as compared to $ 5,610 in 1Q2024.  (As a comparison, SCI reported “Average Revenue per Service” in 1Q2025 as $ 5,743)

• Preneed Interment Property Rights Sold:  This category declined for Carriage Services to 3,100 in 1Q2025 as compared to 3,244 in 1Q2025 — a decline of 4.5% on the year.

Finally, I think a statement by CEO Quezada gives a mindset of where Carriage Services wants to go.  He finishes his prepared statement with this sentence, “As we become a premier experience company, we are proving that passion, operational excellence, and financial discipline turns vision into value for our shareholders”.

My take on that statement is that the management of Carriage Services is focused on providing an “experience” to their clientele that over time creates a greater value to their shareholders.  That is a great aspiration to have. . . . . and it will take strategy and execution to get there.  However, I see Carriage Services continuing that march forward at this time.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Carriage Services and of Service Corporation International.

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“A servant’s attitude guided by Christ leads to a significant life”

As has become our custom when an article about one of the Death Care Index (DCI) companies is published in Seeking Alpha we bring that article to you.  Last week an article about Carriage Services was published titled “Carriage Services:  Strong gains look beckoning in 2025″.

You can access that article here.

As is also our custom with these types of articles, we present them to our readers with no opinion on our part.  Here are a couple of exerpts, however, from the article:

• “Carriage Services shows strong growth in Preneed cemetery sales, and free cash flow gains, and has revised guidance upward due to robust quarterly earnings beats.”

• “. . . . it wasn’t surprising to see the company report a strong earnings beat due to an 11% top-line gain over the same period of 12 months prior. Strong gains in both the top & bottom lines resulted in management bumping up full-year top-line guidance to approximately $400 million and adjusted free cash flow to approximately $60 million.”

• “Carriage’s fiscal 2024 trends demonstrate that momentum may be ramping up even further in the funeral & cemetery provider. Why do we state this? Considering that earnings growth is the prime driver of stocks on Wall Street, Carriage is projected to deliver over 21% growth in fiscal 2025.”

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“A servant’s attitude guided by Christ leads to a significant life”

I recently read the Carriage Services Earnings Call transcript from last week which pertained to the company’s 4th Quarter of 2024 as well as their financial year end for 2024.  It’s interesting that as I read the transcript, which you can access here from Seeking Alpha, several well-meaning cliches came to my mind. . . .

First of all the transcript brought me back to the 1960’s and the advertising campaign from Avis in battling car rental leader Hertz.  That campaign which fed on the slogan “We’re #2, we try harder” is credited with cutting the market leadership of Hertz in half.  While they don’t implicitly say anything like that in the Earnings Call, you just get the feeling that Carriage Services management, because they are smaller than industry leader Service Corporation International (SCI), is simply “trying harder” to cut the gap.  (Here’s an archived article on the Avis campaing from the Denver Post.)

Secondly, while many people try to analyze the game of golf and improve with hundreds of little tips, I’ve broke down my golf game into only two criteria — Strategy and Execution.  I build a strategy for each shot and then try to execute that shot  —  of course, the strategy has to be within one’s ability and as your ability improves your strategy can get more complex. . . . From reading the transcript I get that feeling from Carriage Services also.  They are building a strategy for each shot — supplies, payments, preneed, organic growth — and then trying to execute that strategy. . . . and, as they successfully execute on that strategy their abilities will grow and the opportunities that growth brings will then bring bigger and more complex strategies in the future.

However, the cliche that really comes to the forefront for me is “Laser focused”.  The management team of Carlos Quezada and Steve Metzger took over about two years ago and their comments indicate that they are “Laser focused” on moving Carriage Services forward.  The jury is still out on how well they will do, but there is no denying that when you read the Earnings Call transcript you will more than likely agree that they are “Laser focused” on moving their company forward.

Funeral Director Daily will supply you some of the quotes we found most interesting and informative in the transcript.

Funeral Director Daily had noticed in earlier releases Matthews International, SCI, and Carriage Services all mentioned that their volume counts for the 4th Quarter of 2024 were down. . . Carriage Services CEO Carlos Quezada made the following comments on that issue: 

“We experienced an anticipated decline in funeral volumes . . . . .  The volume decrease is primarily linked to a shift in the flu season, which usually starts late in the fall and increases through the winter months.

Our January and February volume trends are positive, indicating that a late flu season may have shifted volume from the fourth quarter of last year to the first quarter of this year. . . . 

 . . . as we look into what happened, we did some research with CDC. It seems pretty clear that there is a shift of the flu season that came late this winter season and started really more into the end of December, beginning of January and, of course, continues as we speak today. And consequence of that, it is that today, we do have greater volume for both January and February that we had in Q1 of 2024.”

In answer to a question about divestitures (the sale of funeral homes or cemetery properties) and “right-sizing” the company, when asked how many funeral homes the company would have, President Steve Metzger answered as such:

“To confirm the number, this should result in core fewer funeral homes.”

In answer to a questions about spending and where cash-flow is going, CEO Carlos Quezada made the following comments:

. . . 2023 and 2024, our focus was to drive as much as we could organic revenue. We were pretty much in the backseat of acquisitions. Our last acquisition was in March of 2023 with Greenlawn. And then we focus on paying down our debt.

So part of that effort was to allocate capital to high-growth projects, which was basically preneed cemetery. . . . . The organic growth continues to be a focus at Carriage. However, this is the year that we’re able to go back to growth mode. We have been able to get the structure that we needed over the last 2 years, get the team in place, get the systems right. . . . “

In answer to a question about the financial impacts of the company’s divestitures in 2024, President Steve Metzger answered as such:

“.So for 2024, roughly, we sold about $5.5 million worth of revenue. which represented around $1.8 million of EBITDA. Proceeds were just over $12 million for the year. . . . anticipating 2025. As we look at 2025 right now, and some of this is what we’re targeting. We have a couple of things under contract that have not closed. But we’re looking at roughly, call it, $25 million worth of proceeds.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  That is only a sampling of some of the items discussed in the Earnings Call.  There’s more including potential deals with suppliers to save costs, more about Carriage Services’ “Project Trinity” which is a future consumer facing platform the company has high hopes for.

And there is always “data points” one can take from these discussions and apply to your own funeral home.  For instance, President Metzger mentioned that in 2024 they sold properties and the proceeds were “over $12 million”.  He also mentioned in the same breath that the revenues of those properties were $5.5 million and the EBITDA was about $1.8 million.  So, you can come up with simplistic data points of the aggregate which would give you the figure that the properties were sold for about 2.2 times revenue and/or about 6.7 times EBIDTA.

You have to be careful when using those multiples as an absolute because we are not given all criteria on the sales, but the comment does give a data point about sale prices.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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