When Ted Kennedy eulogized his brother Bobby (RFK) at his funeral following his assasination in 1968 he made this comment about what RFK had at one time said about his ability to look forward, “Some men see things as they are and say why. I dream things that never were and say why not.”  Here is a copy of that eulogy.

I often think of that phrase when  I think “outside the box” for solutions.  And, today with the Death Care world centered in Chicago I thought it might be a good time to give you a couple of my “Why not” ideas.

My thoughts were somewhat re-kindled when I read this recent article in Geek Wire about Recompose, the original natural organic reduction business.  The article is not only about Recompose’ success but about their desire to move forward with additional locations.  And, one of their thought processes to do so is with the concept of “Franchising”.

Franchising is one of my “outside the box” ideas.  I’ve often thought that a Direct Cremation business would be perfect for this type of growth.  Franchisors (those that franchise) develop systems of operations leading to profits that can be replicated.  Franchisees (those that eventually buy into and own the local franchise) have the abilty to purchase and operate their own business, that has a proven track record, under the conditions set up by the franchisor for, in most cases, a percentage of revenue paid to the franchisor.

I think that there are many young people willing to work hard and build their own business in Death Care without the financial ability to build a traditional funeral home.  However, a direct cremation, pre-arrangement, celebration, and services “franchise” could be operated from a leased strip mall location with an additional cremation building in another location.  It could even be done without a cremation building and using a local trade crematory if necessary.

A Neptune Society mall location

Think of an operation such as Neptune Society — already with a formidable name in the direct cremation business and how they could rapidly expand their business by offering franchises.  By my count, there are probably at least 200 SMSA’s (Standard Metropolitan Statistical Areas) that could, by population, support their own distinct direct cremation franchise. . . . .Who knows, maybe existing traditional funeral homes would purchase a direct cremation franchise in their own community to gain that end of the Death Care spectrum market share.  (Here’s a list of America’s SMSA’s)

As an aside here on the idea of SCI offering Neptune Society franchises that might be purchased by existing large traditional funeral homes to help them capture that lower-cost share of the Death Care market. . . . . the idea of the existing business relationship as franchisor/franchisee of SCI and these funeral homes would probably give SCI an edge over others in being able to acquire the existing funeral homes at some point in the future — if they were interested in the aquisition.

Finally, in the business world of Death Care that strives on local “brands” the ability for a national franchisor of direct cremation to utilize franchisee advertising fees to build a national brand might prove formidable to local direct cremation companies as our society moves forward and Death Care provider choices change.

My second “outside the box” thought has to do with Royalty Payments.  I’ve thought of this for some time and, while there would be pros and cons for both buyers and sellers, I wonder if anybody has ever sold their funeral home on a price that included, in part, future royalty payments on the revenues of the business under the new owners?

Tom Anderson
Funeral Director Daily

For instance the ABC Funeral Home is up for sale and a value is determined.  Instead of taking that value, would they be better off to take less than the full price and then receive a percentage of revenues going forward for a period of time?  Again, pros and cons to it — such as a buyer can pay less up front and a seller will get less up front. . . . but then, there are expected recurring payments.

Again, a big part of the family funeral home’s value is in their name and reputation.  By having a royalty payment they would be able to share in the, hopefully, ever-increasing value of the brand instead of being paid off at the sale time and receive nothing for the future value and goodwill of their name.  And, I would suggest a deferred payment(s) for a “date-specific” sale value is not the same as a royalty that could grow by increasing use of the business by consumers — at least some consumers who will only continue to use the funeral home because of the former owner and their relationship with them.

Who knows. . . . this financial incentive might also make for a better past owner relationship with the new owners.

Anyway. . . thoughts outside the box.  As American business methods and modes continue to evolve, I don’t think funeral homes should be left out of new ways of thinking.

Related — The Listerine royalty payment story — In 1881 the owners of what we now know as Listerine mouthwash allowed others to know the formula, bottle, and sell their product.  For this knowledge they asked for a $20 payment for every 144 bottles sold.  By 1884, because of poor sales, that royalty payment dropped to $6 for every 144 bottles (14 oz. bottles) sold.

The interesting thing about that contract is that there was no end date set and Listerine eventually became a popular product.  Today, the current holders of the Listerine Royalty contract are still paid $6 for every 2,016 ounces (144 14 oz. bottles) of the product sold.  It equates to millions of dollars annually.

My point is that even with only a small royalty a family-owned funeral home, over time, can create more and more wealth opportunities for descendents while at the same time allowing a new owner to “get-in” the business for a lower up-front investment.

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

It’s a staple fact that “Death” only occurs once for each human being.  And, in the business world of “Death Care” that’s a fact we have had to live with.  A recurring or repeat client is defined by a returning “family” not by repeat business of one individual.

Does that mean that “Recurring Revenue” will never come to Death Care?

First let’s define “Recurring Revenue” as defined by Gemini Artificial Intelligence that states:

“Recurring Revenue is a business model where companies earn predictable income from ongoing customer payments for subscriptions, memberships, or usage-based services over scheduled intervals (monthly, quarterly, or yearly), rather than from one-time sales.  This model provides greater revenue predictability and stability, allowing for more accurate financial forecasting and growth planning, and is often measured using metrics like Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR).”

 

There are items that come to mind rather quickly that are mature forms of Monthly Recurring Revenue (MRR) such as insurance payments, credit card interest, and fitness club memberships.  And there are those companies that found a way to do Recurring Revenue in their line of business and reaped incredible benefits and profits from doing so.

Two of the latter that come to mind are Netflix and Microsoft.  If you go back a decade or so before streaming there was video or CD rental stores where you would rent a video or CD movie for a set fee for the night.  Upstart Netflix competed by offering these videos or CDs by mail for a flat monthly fee — for that fee you could access as many movies as you would like. . . . . And Microsoft, they moved from being paid a set fee by the computer company for each computer sold with Microsoft software installed to a subscription service where the purchaser paid an annual recurring fee for the use of Microsoft products via online installation.

Both Netflix and Microsoft profited handsomely and still continue to use Recurring Revenue methods for sales.  Even in the world of writing this newsletter blog I need to subscribe to two Monthly Recurring Revenue companies in order to allow for photo images (istock) and distribute the newsletter (Mailchimp).

I think that Netflix and Microsoft both realized that you can gain more revenue “over time” than you can for a one-time purchase and there are lots of other advantages of MRR, such as raising fees or adding amenities for a price, that are easier to do in small monthly increments than in a one-time larger cost application.

So, the question should be asked in Death Care.  “Can a funeral home or cremation provider gain more revenue “over time” than they can for a one-time services and merchandise purchase at the time of death?”

In funeral service there are funeral home “Software as a Service (SaaS)” providers that provide their services to funeral homes and cremation operators on a monthly recurring model.  However, outside of preneed insurance premiums, I’m not aware of any other MRR methods that traditional funeral homes and cremation providers offer to retail consumers.

Tom Anderson
Funeral Director Daily

I also think that funeral homes that can figure out a way to offer their services on a MRR model will reap great benefits when doing so.  About the only service that I can think of that would work in that fashion today is some type of grief, bereavement, or mental health benefit.  There are suppliers that offer such and many funeral homes offer them free of charge for a time period post-funeral.  How about figuring out a way to offer this type of service on a monthly recurring revenue model going forward?

Would families subscribe to it?  Are there other services that a funeral home could piggy-back off of — such as estate services that would consolidate a group of benefits consumers would pay monthly for?  I challenge you to think of the opportunities.

Or will a company outside the realm of funeral service offer some type of MRR model for funeral or cremation services?  I can envision an insurer of “supplemental” insurance coverage such as AFLAC offering a preneed “Direct Cremation Option” upon death for a certain fee per month.  And of course, like life insurance, the younger you are when you take the coverage, the less per month it would cost.  AFLAC would pocket the fees every month and pay so much, possibly a fixed amount, to a cremation provider upon a death.  And, they would probably create higher profits as clients “lapse” their coverage over time.

In any regard, monthly recurring revenue charges are here.  I would challenge you to see how many you have — cell phone, gym membership, streaming services, internet services, movie passes, print subscriptions, and the like.

And, I also believe that whoever finds a way to do so with Death Care services will profit from the ingenuity of doing so.

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

Last week Delta Airlines reported record revenue for the 2nd Quarter of 2025 and also reported that their earnings for the quarter were higher than expected.  All of this happened in a quarter where the consumer and business people were supposed to be cutting back on expenditures because of tariffs and economic concern and the thought process that the company’s expenses had moved up because of inflation and that would limit profitability.

More and more flying or traveling by public carriers such as Delta comes down to an experience.  Every passenger on a flight is going to the same destination but how the experience they choose to get there and how that is executed by Delta will be what they remember.

Is that a little like Death Care?  We can have a loved one buried or cremated but how we choose to do so and how that choice is executed by our Death Care practitioner will be what we remember and consumers will decide on if the service value was commensurate with the price they paid.

Like flying on public carriers, Death Care provides its services to consumers of all means —  from the very wealthy to the very poor and every situation in between.  Delta needs to provide the lowest possible costs to gain consumers who are willing to travel with “no frills” much like funeral homes need to be aware of having prices that consumers are willing to pay.

However, Delta has realized and most funeral homes have realized that if all clients choose the lowest priced product there is not enough margin to afford the amenities at your business to attract clients of a more discriminating nature. . . . and many times it is those clients that provide the margins to raise profits.

A big part of Delta’s success is what they call “Premiumization”.  Delta’s 2nd Quarter highlighted that “Main cabin revenue fell 5% for the June quarter, compared to a year ago. Premium ticket sales, on the other hand, rose 5%, underscoring an economic split between affluent customers and more price-sensitive ones”.

Here’s what one economic newsletter said of this situation, “spending data in other sectors reflects business-as-usual consumption in some areas but cautious spending elsewhere. More affluent customers are willing to shell out, while lower earners are pulling back.”

So, can funeral homes retain cost-conscious customers while picking up extra income and margin with customers who will spend more if offered more services?  I think so.

It might take some changes though —  Consumers are all different as are their values and perceptions of value.  In air travel getting from Point A to Point B at the lowest possible cost is many consumers goal.  However, having a larger seat, or leg room, or premium cabin service is important to many people and those people will “pay-up” for that amenity that gives them a better travel experience.

I think the same is true in Death Care.

Tom Anderson
Funeral Director Daily

I also think the airlines’ modus operandi of selling their travel experience online is a positive factor in their ability to “premiumize” sales.  Think about it. . . .you’re sitting in the comfort of your own home or office looking at all of the options available on the airline’s website.  Most of the airlines offer their minimum experience with a seat in the rear section of the plane — sometimes only in the middle seat.  There is a small “premiumization” of $15 to $30 simply for selecting a seat on the window or aisle.

With no pressure on the consumer he can think about it for a minute and envision himself on the window seat never having to get up and move during the flight. . . .And, to some that is worth $20 or $30.

I think one of the big keys to this situation is the ability to make these premium decisions online with no pressure.  It’s my opinion that making theses types of decisions in person, and especially in a funeral arrangement setting where decision fatigue can set in, causes much more anxiety than doing so online.

When I look to the psychology of purchasing Death Care products I also thought of the process that I went through with in-person arrangements with family members.  I remembered what I termed “Decision Fatigue” happening often.  Family members were asked to make so many decisions — day of funeral, time of funeral, musicians, pallbearers, visitation hours — that they eventually developed a fatigue as the arrangements went on. . . . I would argue that the client’s apparent fatigue stopped me from asking about additional purchases at times. . . .such as cremation jewelry, Parting Stone, or options available for memorialization such as placement in Better Place Forests.

I think online purchasing where the consumer can go at whatever pace they desire would be a big asset in those sales  — as I believe it is in airline sales.

So, I think there is a real potential in “premiumization” of Death Care allowing for larger margins, but funeral homes are going to have to welcome online sales and online pricing to do so.  They are also going to have to invest in the proper technology program for online purchases.

What things could be “Premiumized” with additional revenues over and above a base package?? —

• Day of Service? — I remember in my funeral days having more funeral services on Mondays and Saturdays.  Could you charge an extra $150 or $200 for a service on those days?
• Cremation Concierge?  — Hand delivery of cremated remains to a home so a family member does not have to come back to the funeral home?
• For those Do-it-Yourself Memorial Service families — could you offer a register book, folders, and thank you cards for an additional fee?  What about an obituary writing service?

These are only a couple of items that come to mind off the top of my head and they don’t even take into account how you could “premiumize” merchandise such as caskets, urns, and other memorialization items such as jewelry or candles.

My guess is that there are computer programs out there that can help you in offering preneed and/or at-need packages with premiumization choices to consumer already.  While it has been about a year, which means that the process is probably even better and more refined than when I first saw it, I went through a simulated pre-need presentation and purchase completely online.  And, I was really impressed with how it was done. It was offered by a preneed company called Prelude and you can access their website here.

Final Thoughts — I’ve learned consumers are individualistic.  How one person wants to experience getting from Point A to Point B is different from another person getting to and from the same place.  The same is true of how a person wants to experience the memorialization of a loved one.

And, in most communities, America has a diverse section of economic ability among the residents.  Prices of funerals and cremations should reflect a base point for people to be able to memorialize a loved one. . . . .but there are many in each community who will “premiumize and/or personalize” their choices regardless of cost.  How funeral homes can deal with that realization could play a big difference in your funeral home “just getting by” or “being wildly profitable”.

It’s another point in my realization that Death Care is continuially closing in on the nexus of tradition and technology.

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

Funeral Director Daily presents you the final report of our hat trick of financial reports this week.  Today we bring you the results of Matthews International’s operations for the period of January thru March 2025 which is the company’s 2nd fiscal quarter of the year.  Earlier this week we reported on the same period of time for Service Corporation International and Carriage Services. . . . It is the first time in my writing of Funeral Director Daily that I can remember having three quarterly reports coming out in the same week. . .

In any regards, there is a lot to digest in the Matthews International report.  As we always point out, Matthews is a diversified company with one of their three segments involved in Death Care.  That segment includes a cremation business that builds crematories, a wholesale casket business known as Matthews Aurora, and a segment dedicated to cemetery memorials and markers, as well as a complete line of cremation products.

For the 2nd Quarter of 2025 Matthews reported that their Memorialization Segment had revenues of $205.6 million which is down about 7.5% from the same period in 2024.  Furthermore, the company states that the Memorialization Segment has 6-month sales revenue of $396.1 million as compared to sales of $430.2 million for the first six months of fiscal 2024 — that is a drop of about 8.0%.

Here’s how Matthews International explained that sales slide in prepared remarks in a press release, that you can access here, on the company’s 2nd Quarter, “The Memorialization segment decline primarily resulted from lower unit volumes of caskets, cemetery memorials, and cremation equipment, partially offset by improved price realization. Lower casketed deaths resulting from the continued normalization of death rates post-pandemic impacted the segment’s sales compared to a year ago.”

In essence, it seems to me that, first of all, there were less casketed deaths in the quarter, but it also seems to say, “We raised prices and then sold less”.  In my opinion, that is probably a strategy that will not play well in today’s market.

The Matthews Dilemma:  In the press release about the 2nd Quarter 2025 results Matthews CEO Joseph Bartolacci also makes this comment, “The Company’s comprehensive evaluation of strategic alternatives for our entire portfolio remains ongoing. The Board and I firmly believe the inherent value of the Company is well above current trading levels and, over the next several months, we intend to identify the appropriate path to unlock this shareholder value. . ”

Matthews International, in the latest report, state a 6-month Net Loss before Income Taxes of over $17 million as compared to the same period of 2024 when they reported a $4.8 million positive income in the same category.

In getting to that equation, not only has the Memorialization Segment seen reduced year-over-year sales in 2Q25 but so has the Industrial Technologies Segment of the business — which had a sales decrease of 30.4%.  The only segment that had an increase was the SGK Brand Solutions Segment, which increased sales by about 6.2% year over year.

However, as this recent press release indicates, Matthews International has recently sold what appears to be about a 60% equity interest in the SGK Brand Solutions Segment of the company.

Related Article —  “Matthews International sells SGK Brand Solutions”.  Pennsylvania Business Report (PA)

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  As a Death Care publication I look at the business situation at Matthews International with a wonder of how will it all turn out.  The SGK Brand Solutions Segment sale should bring in some much needed capital which one would expect would be used to turn around the revenue declines at the Memorialization and Industrial Technologies segments.

It should also be noted that CEO Bartolacci made this comment about the sales in the Industrial Technologies Segment, “. . .demand and interest in our energy storage solutions are regaining strength as customer quotes since early February 2025 have exceeded $100 million.”   That fact would also be a positive development in getting the company back on track.

With total company sales down about 10% for the first six months of Fiscal Year 2025 ($829.4 million as compared to $921.2 million for the first six month os FY2024) I would expect that there is some pressure from stockholders to turn things around.

In my opinion there is a hope that the energy storage solutions that Matthews has invested in turns out to be a viable winning product and I would also expect some type of move to regain positive momentum in the Death Care/Memorialization segment as well.

I expect the 2nd half of Matthews International’s 2025 fiscal year, and the decisions made in that time period, to quite  possibly be the most significant and decisive six months in charting the future plans and strategies for the company’s next decade.

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

I’m writing this article on Tuesday morning ahead of President Trump’s address to Congress and at a time when certain investors seem to have lost some faith in the markets as the Dow Jones Industrial Average is currently down over 700 points on the day.  The world can change between Tuesday and when you read this on Friday but I thought it a good time to bring some news that I’ve seen on the economy to Funeral Director Daily readers.

Before I get into some thoughts and articles others may have on the immediate economic future I will share with you  two things that enter my mind when digesting all the information available.

 

1. Before you cross a bridge, somebody needs to build the bridge.  When American soldiers closed in on Berlin at the end of World War II German soldiers in retreat “blew-up” bridges over rivers to make it harder to get to Berlin.  Before American soldiers crossed these rivers they had to build the bridges. . . taking some time and delaying the outcome.
2. For about 4 or 5 election cycles back in the 1980’s I served on the volunteer campaign board for my local United States Congressman.  He repeatedly told me “Perception win elections”.  Over the years, I’ve thought about that statement lots of times including when I ponder why people pick a certain funeral home or why they choose cremation over earth burial.. . . . In so many choices of people, I’ve learned it’s not always about “Reality”, but about “Perception”.

 

Where we are today shows a lot of uncertainty with the American economy.  Interest rates – higher for longer, Inflation – not being tamed as yet, Manufacturers raw material costs rising — the highest level since 2022, and Consumer spending dropping last month – the largest such drop in four years, Hiring — apparently slowing down.

Those items, and possibly others including the unknown effects of potential tariffs, have caused the Atlanta FED Gross Domestic Product (GDP) forecast to dip into negative territory for the first time in a period of time.

Recent Atlanta Federal Reserve Branch prediction of GDP

From my point of view, when America gets on the line of such “negative” thoughts, the perception of the American consumer and the potential outcomes of the economic situation is exacerbated by Americans reaction of holding on to their cash for a potentail downturn. . . .i.e “Perception becomes reality”.

Again, from my point of view, the Trump administration believes they are in the process of “building the bridges” that can make our economy stable for a period of time.  The reality of that thought process is that businesses cannot cross that “business river” until the bridges are built and the time between the onset of construction and completion can be a very unstable period.  It’s a period where I believe that the management of a company’s resources is very important to their long-term success and that discretionary management of resources needs to be thought through.

Tom Anderson
Funeral Director Daily

So, how do I think that thought process relates to Death Care?  My take, in a broad sense, is that when the American consumer “perceives” an economic downturn or a “tightenting of the belt” if you will, they become adverse to spending.  While that may mean putting off discretionary family purchases such as furniture, when it comes to mandatory expenditures such as funeral or cremation expenses, I think many people will lessen their spend. . . . . In essence, that situation of less spend comes at the worst time for funeral homes — a time of inflationary expenses for the business while at the same time bringing in less revenue (and margin) for the business because of this dynamic.

On the positive side of the equation, if you are a company with ample cash on hand you might be able to make capital improvements or purchase prodcuts at a discount because trades people and suppliers may be in the same situation of rising expenses and lower revenue and in search of revenue wherever they can find it.

Like so many decisions of a going-concern business, the management of resources at differing times can make a huge impact on the future success of the business.  My best advice is to make sure you know where your revenue is coming from and where it is going and make the well thought-out decisions on how you move forward.

Related —  Here’s some articles on the economy that I came across this week and were part of the thought process for this article:

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

Yesterday Funeral Director Daily reported on the 4th Quarter and Year-End press release of Service Corporation International.  And, last week SCI also had it’s quarterly discussion with financial company personnel in which we peruse the transcript for more detailed information.

As has been our practice of late with this type of information we will link the transcript of the Earnings Call courtesy of Seeking Alpha as well as a new concise report by Seeking Alpha called “Earnings Call Insights”.  In addition, Funeral Director Daily will post some quotations from the Earnings Call below.

CFO Eric Tanzberger on “Growth Spending”:  “We also invested about $19 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. For the full year, this brought the total growth capital spend to just over $100 million, which was up about $9 million from 2023 as we identified meaningful opportunities to invest in greenfield cemetery and funeral projects.

Let’s talk a little bit about acquisitions. So we invested $19 million into business acquisitions in the fourth quarter. In total, we finished the full year with an impressive $181 million of acquisition spend.”

CEO Thomas Ryan on “4th Quarter Comparable Revenue and Services”:  “Comparable core funeral revenues decreased by $9 million or about 2%, primarily due to a 4.4% decrease in core funeral services performed, which was somewhat offset by a healthy 2.7% growth in the core average revenue per service.”

“Comparable cemetery revenue increased by $20 million or about 4%. Core revenue was primarily responsible for the increase, as it grew by $21 million over the prior year quarter.”

Tom Ryan
SCI CEO

CEO Thomas Ryan on the prospects for 2025:  “Within our funeral segment, we expect flat to slightly down funeral volume compared to 2024, with the average revenue per case growing at inflationary rates, slightly negated by the effect of a modest cremation mix increase.”

“We do expect to see higher general agency revenue generated from the favorable impact of our new insurance agreement, which should drive healthy profit growth for the funeral segment, increasing the gross margin percentage by 80 to 120 basis points.

We expect preneed funeral production to be slightly lower in 2025 as we continue the transition of SCI Direct and as we focus on increasing the underwritten insurance product sales in our core channel.”

“For the cemetery segment, we anticipate that we can grow preneed cemetery sales production in the low to mid-single-digit percentage range, resulting in cemetery revenue growth of about 2% to 3%.”

“Continued focus on managing inflationary costs should result in reasonable segment profit dollar growth while maintaining our impressive gross margin percentages as compared to 2024. Below the line, we expect favorable impacts from slightly lower interest expense . . . . “

CEO Thomas Ryan in answer to a question on the lingering “Pull-Forward” death rate effects of the pandemic:  “I think there’s still some hangover pull-through because there’ll be — it’s just a diminishing amount. And I think the other factors take over market share, preneed demographics that those things will offset what little impact COVID will continue to have.”

CEO Eric Tanzberger on a question about “Acquisitions”:  “I would say the pipeline continues to be robust. And if you remember, we’ve been saying that really kind of coming out of COVID. But these deals ebb and flow.

You have to make sure that it’s a win-win situation with the independent family and organization that is ready and wants to raise their hand for a liquidity event. Sometimes you have a start and stop in those situations. Sometimes it takes a lot longer. These are sometimes second, third, fourth-generation families that need to align accordingly, and all want to create the liquidity event.

So the pipeline has been strong. And — but in terms of closing the deals, it’s going to ebb and flow based on that. But just as strong as I said last year that end up coming to fruition in terms of the timing of closing, I still am just as excited this year with the strength of the pipeline.

So we’re going to give you an initial guidance of (spending) 75 to 125 (million dollars). If it ebbs and flows in the right direction based on the strength of the pipeline, I hope we could exceed that again this year like we did last year.

But again, a little bit of this is we want a win-win situation. We’re not in a situation where we are going to force people to sell. We want to — that family and that organization to be very excited about joining us and have all their ducks in a row and ready.”

CEO Thomas Ryan in answer to a question on “Lower Service Case volumes”:  “January, on the funeral volume side is down just about 3%, which wasn’t very far off our expectation. . . . . .

. . . . I think it’s a little of a pull forward. And like I said, it’s not — I guess, it’s not technically the pull forward when I say we saw extended periods of excess deaths that had occurred maybe longer than other people anticipated. And you couldn’t explain why, right? You just had — you knew these categories of deaths are down, there could be cancer screenings, it could be overdose, all these different things, mental health issues.

And now I think categorically, all the data that we’re looking at is saying that the country is kind of healing, which is a good thing. And so maybe normalizing back. And that’s the piece that’s probably moved us a little bit is to say, hey, in a good way, those things are normalizing again.

And now the factors that we would anticipate to contribute to our growth, which would be our strong preneed backlog, our competitive position in the markets to grow market share. And then just the general aging of America, that those three things will begin to be the more dominant talking point as we go forward, and we’ll see less and less COVID impact, less and less excess deaths conversation.

So that’s kind of where we are. And again, we feel pretty good about where we are. We think it could be slightly down, it could be flat. I mean, it may surprise us to be up slightly, but it’s pretty hard to predict right now. And we haven’t seen a real impact from the flu season yet. We hear a lot about the flu, but really hadn’t seen it, I’d say, in our numbers.”

• To read the entire Earnings Call Transcript from Seeking Alpha click here.
• To read a summary of the Earnings Call Transcript from Seeking Alpha click here

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

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

Yesterday Funeral Director Daily’s feature article was about Matthews International and its 1st Quarter 2025 Fiscal Year results press release.  As we digested that report, which like many public company reports, is big on numbers and sometimes small on the underlying issues and causes, we were informed that Matthews International had suffered a 10.7% loss in total sales and a 8.5% percent loss in sales of their Memorialization segment.

Many of those underlying causes that might cause the declines are left to speculation.  After reading the company’s Earnings Call transcript with those that follow the company in the securities business, more information becomes available and a better total picture of what is happening within the company comes to light.

Here’s what we learned about the Memorialization segment when we read Chief Financial Officer Steve Nicola’s statements from the Earnings Call:

” . . .sales for the Memorialization segment declined for the current quarter compared to a year ago, primarily due to lower unit volumes.”

“Estimated US casketed deaths declined from the same quarter a year ago.”

“The (Memorialization segment) decrease primarily reflected lower granite memorial sales and a decline in casket unit volumes.”

” Granite sales were higher last year as, in addition to regular volume, the business was working down backlogs, which had built up during the pandemic. “

“Bronze memorial sales were also lower for the quarter.”  

“Memorialization (segment) sales for the current quarter were unfavorably impacted by the disposal of the company’s unprofitable European cremation and incineration equipment operations.”

“. . . decreases were partially offset by higher price realization and incremental sales from the acquisition of a casket distributor in January 2024.”

In order to bring the sales decline into more focus, CEO Nicola made this comment in the Q & A portion of the Earnings Call transcript, “So the decline in (Memorialization) revenues was actually more weighted to the granite. . . . . .But again, the European cremation and incineration business, which was an unprofitable business for us, also was a significant contributor to that decline. So those two were the more significant pieces.”

You can read the entire Earnings Call transcript here.

You can read a summery of the Earnings Call here.

Funeral Director Daily take:  According to the latest Quarterly results for Matthews International the Memorialization segment contributed 47.4% of the total 1st Quarter revenue to the company.  ($190.5 million of revenue out of a total of $401.8 million total revenue).

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On Monday of this week Park Lawn Corporation announced that they had continued their Texas acquisition growth with the purchase of the Callaway-Jones businesses located in and around Bryan, Texas.

According to the press release which you can read here, Park Lawn Corporation acquired  “substantially all the assets of Callaway-Jones Funeral Home and Crematory located in Bryan, Texas; Callaway-Jones College Station Funeral Planning Office located in College Station, Texas; Rest-Ever Memorial Park located in Bryan, Texas; and Cozart Funeral Home in Normangee, Texas.” 

Here’s what J. Bradley Green, CEO of Park Lawn Corporation, said in prepared remarks included in the press release, “We are excited to announce our partnership with a highly respected family that is deeply rooted in the Bryan-College Station community. This collaboration not only strengthens our presence in Texas but also enhances our ability to serve our families with the quality and care they expect from us.”

Here is the website for the Callaway Funeral and Cremation Centers.

Here is the website for the Cozart Funeral Home.

Here is the website for the Restever Memorial Park Cemetery.

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Within the last week I received my health insurance plan 2025 rates and I also paid the property and casualty insurance on my lake cabin.  The health insurance premium was up 7.4% and my P&C cabin insurance also took a hike.  I also was at a funeral home seminar where I heard a commercial insurance agent tell all of us in attendance to expect commercial rate increases on our funeral homes in 2025.

It’s also no secret that property insurers are having more than ordinary claims due to weather incidents in Florida and other Southern and Southeastern states.

And, just to put some icing on the “rising costs” cake I noticed this recent article from CFO titled “Budgets for base salaries expected to soar again in 2025″.

So, even though we have had cumulative inflation of about 21.4% since the pandemic began in 2020, it also looks like some of the delayed costs that are associated with “historical results” such as insurance performance are now expected to continue that rise. . . and it may be that the rise in future premiums is no small number simply because of the recent history of losses in the insurance sectors.

Tom Anderson
Funeral Director Daily

In the funeral home business where most of the costs of doing business are fixed costs these increases eventually lower your margins and give you less money for other opportunities.

Couple that with the fact that many funeral home consumers may reach a Plimsol line of what they will pay for death care services and as your prices rise, they may choose to have fewer and less costly services.  That makes the rise of fixed costs, without great cost-containment efforts all the more crippling.

It’s important to note that your “Margins” are your Revenues minus your costs.  When it is difficult to raise revenues, such as times when lower-priced cremation keeps increasing in consumer choice, the best way to raise your margins is through cost-containment.  That does not simply mean to cut costs, but it calls for creative energy and thinking to look at other ways to do operational functions that may save costs — such as how you schedule staff.

In any regard, until one can get a handle on their costs I would use this time in the Fall of 2024 to take an itemized look at all of my expenses and try to imagine how I could do some things differently for 2025 that might reduce costs.  Being highly profitable takes effort and lots of thought. . . . I learned a lot by asking my staff for suggestions on how we could get more efficient. . . . and they usually pointed out really good suggestions that worked.

Related —  Recent Cost Related Articles

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