Matthews International is a company that in 2025 received over 50% of its revenue from what they call their “Memorialization” segment.  That segment consists of Aurora Casket, Matthews cremation products, and a complete line of cemetery products and markers.  During the past calendar year Matthews International also acquired Death-care oriented Dodge Company to add to its group of operating companies in that segment.

It’s also fair to say that they are a company that has seen transformation in 2025.  Of their three operating units at the beginning of the year, we already told you that they acquired Dodge Company for the Memorialization segment, but they also divested or sold a second operating unit described as the SGK Branding unit, and have seen their Industrial Technologies segment caught up in a lawsuit which has probably diminished sales in that segment.

The results of all of that transformation during their fiscal year resulted in Revenues for the 2025 Fiscal Year which ended on September 30, 2025, coming in at $1.497 billion as compared to the prior fiscal year’s (2024) total Revenue of $1.795 billion — a drop of over 16%.  Of course, the SGK unit did not operate all year, however, Memorialization and Industrial Technology segments also had lower Revenues in FY25 than they did in FY24.

Specific to the Memorialization segment, which we are most interested in, Revenues for FY25 came in at $809.5 million for the year as compared to $829.7 million in FY24 — a drop of about 2.5%.  One positive sign we noticed was that for the company’s 4th Quarter (July, August, and September) Memorialization segment Revenues came in at $209.6 million as compared to FY24’s 4th Quarter of $196.8 million — showing growth of 6.5%.  However, in relation to that increase, we must remember that Matthews International had the Dodge Company product revenue in 4Q25 and not in 4Q24.

Here are some prepared comments from Matthews International CEO and President Joseph C. Bartolacci in the press release (that you can access here) that relate to the Memorializion segment:

“I am pleased to report that we had a strong finish to fiscal 2025 as our consolidated results were ahead of our initial expectations for the fiscal 2025 fourth quarter.  Sales for the Memorialization segment and warehouse automation business outperformed their levels from the same quarter a year ago, and we continued to lower our corporate and other non-operating costs.  Please note that the divestiture of the SGK business was a significant factor in the year-over-year comparability of the Company’s financial results.”

“The Memorialization segment reported higher sales for the current quarter compared to a year ago, primarily reflecting the benefit of its recent acquisition of The Dodge Company.  Higher sales volumes for bronze memorials and inflationary price realization also contributed to the sales increase for the quarter.”

“For fiscal 2026, we expect continued growth in the Memorialization segment, particularly with the full year contribution from the acquisition of The Dodge Company.”

 

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Matthews International has been in business for 175 years so the time that they are taking in re-positioning who they are is a small time in that space.  However, for those of us that follow the stock, the re-positioning and strategic moves that coincide with that effort seem to be taking an eternity.

From my point of view the company in Fiscal Year 2025 derived about 54% of its revenues from the Memorialization segment, and with the SGK segment going away, you would think that percentage would increase next year unless the Industrial Technology segment grows rapidly — which they are waiting for.

However, I sometimes wonder if the company is missing the boat by not being more aggressive in the rapidly expanding technology segment of Death Care.  Much of their Memorialization segment revenue comes from “old, historic” Death Care revenue streams such as caskets and monuments.  I think in addition to those streams, a couple of new, faster growing, Death Care revenue streams – such as technology companies might bring – would fit this company very well.

Oh well. . . that is just my opinion.

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

Security National Financial Corporation, the Utah-based public company with parts of its operation in the Death Care segment, reported their 3rd Quarter 2025 financials last week.

When the President of the company, in this case Scott M. Quist, starts the report in the following fashion you know that as you continue reading the report it won’t all be roses.  Quist started his report with this statement, “While the third quarter was definitely weak from my point of view. . . .  there are some definite bright spots which partially illuminate much of the hard work that has gone on.”

Quist’s commentary and the report can be accessed here.   He did go on to report that the company reported 3rd Quarter 2025 revenues from all three divisions of $89.3 million which is a 1.2% increase from the same quarter of 2024.  However, those revenues led to Earnings Before Taxes of only $10.1 million in comparison to last years comparative quarter of $15.2 million — a drop of 33%.

However, Quist’s commentary also makes this statement, “Our Cemetery and Mortuary Segment also posted improved results over Q3 2024. We are just now seeing stabilized, if not improved, preneed cemetery land sales which are a major profit driver. It is a fair statement that over the last 9 months we have completely revamped our cemetery sales force.”

For the quarter, SNFC’s Cemetery/Mortuary segment posted $8.9 million in sales as compared to 3Q2024’s number of $8.5 million — an increase of 4.5%.  And, there Earnings Before Taxes jumped 7.2% for the quarter to $3.04 million as compared to 3Q2024’s $2.84 million.

For the 9-months ended September 30, 2025, however, the Cemetery/Mortuary segment has posted revenue of $25.1 million which lags last year’s number by 1.6% and the 9-month Earnings Before Taxes has dropped 11.4% to 2025’s number of $7.07 million as compared to the 2024 9-month Earnings of $7.98 million.

Security National Financial Corporation operates businesses in the Life Insurance, Death Care, and Mortgage segments.  The holdings in Death care include funeral homes, cemeteries, a preneed company, and financial assignments.

Disclaimer —  The author of this article for Funeral Director Daily is a SNFC stockholder.

Funeral Director Daily take:  The report on SNFC is short and concise and not much is said about the Cemetery/Mortuary segment.  However, two things I noticed happened to be “on trend” with what I see happening in the greater Death Care business world.

Those two things are that 1) Cemeteries seem to be having a renaissance as more and more people are serious about what I term “Memorialization” of their remains and 2) that earnings to the bottom line in Death Care seem to be less on the same or more revenue — which I think is simply indicative that inflation and higher costs have grown faster than Death Care has been able to raise revenue.

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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”

I was again reminded of stock guru Peter Lynch and his affinity for “boring investments” when I looked at the 2025 3rd Quarter results for Service Corporation International that were issued last week.  Lynch, who you may know, was the broker/analyst/investor who led the mutual fund Fidelity Magellan to a 29.2% annual rate of return from 1977 to 1990 and wrote a book called “One Up on Wall Street” where he told of how he made his stock selections.

I read that book a long time ago and it gave me a solid foundation for investing.  According to Gemini artificial intelligence here’s what Lynch’s philosophy with a company such as Service Corporation International (SCI) was/is :

“In One Up on Wall Street, Peter Lynch uses the analogy of plastic knives and forks to illustrate his preference for boring, low-growth industries. While he doesn’t explicitly link the “plastic knives and forks” quote to Service Corporation International (SCI), he mentions the funeral business as an example of an unglamorous, no-growth industry that is often overlooked but can produce big winners.”

When one looks at SCI’s 3rd quarter return in relation to the high-flyer companies such as Nvidia, Broadcom, Apple, and the like it’s downright boring. . . . . but, as Lynch explains, provides growth over time.  In the company’s 3rd Quarter 2025 Financial Report that you can access here, here is what SCI reported:

• Revenue grew $44.1 million, or 4.4%, over the third quarter of 2024
• Gross profit increased $12.9 million, or 5%, in the current quarter
• Comparable total funeral sales average grew 3.1% over the third quarter of 2024 supported by 13.4% growth in non-funeral home sales average
• Cemetery preneed sales production increased 9.6% in the current quarter

Here’s how Tom Ryan, SCI’s Chairman and CEO  reacted to those numbers and anticipated the future in a prepared statement in the company’s press release, “We are proud to report adjusted earnings per share of $0.87 and net cash provided by operating activities of $252.3 million. Strong performance in our cemetery segment was led by an increase in preneed cemetery sales production of 10%, which drove growth in comparable cemetery revenue of 7% and cemetery gross profit of 12%. An increase in our comparable core funeral average was offset by the anticipated decline in comparable core funeral services performed. In addition, our non-funeral home sales average increased 13.4%, far outpacing the slight decline in non-funeral home services performed. Finally, our core funeral preneed sales production increased 9% with increases in both insurance and trust production. Based on these strong results, we are well positioned to have a strong finish to the year.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:   When you are the biggest at anything lots of people take notice of your performance.  And there is no doubt that SCI is, by far, the largest player in the Death Care business.  My guess is that their Revenue of over $4 billion is probably about 10 times more than there largest competitor so they are very large.

However, they continue to refine their business model so that they are churning out profits even as Death Care is changing.  SCI seems to stay profitable and roll (and adjust) with the waves of changing funeral and cemetery consumer preferences.  With that said, there is no guarantee that that track record can continue and that is what makes investing such an interesting proposition.

I see some “warning trends” that need watching.  Like other funeral home providers who have seen clientele change their selections and methods of disposition, celebration, and memorialization, I think that is starting to happen with SCI properties as well.

If you look at their “Consolidated Funeral financials” they have a line-item named “Non-Funeral Home Revenue”.  They define that line-item as such, “Non-funeral home revenue represents services sold on a preneed or atneed contract through one of our non-funeral home sales channels (e.g. SCI Direct) and performed once death has occurred”.

If you look at the 3rd Quarter Consolidated Funeral Revenue numbers you will see that “At Need” Revenue dropped by about $4.1 million and that “Non-Funeral Home Revenue” increased by about $3.0 million.  That is somewhat insignificant but does also go with a trend that I noticed that shows that “Non-Funeral Home Revenue” was about 4.0% of “Total Consolidated Funeral Revenue” in last year’s report of  2024 9-month numbers and in the 9-month 2025 numbers is was 4.4% and finally in the latest 3Q25 report it was 4.6% of that total.

“Non-Funeral Home” Revenue is probably a growing aspect of SCI’s business. . . and that is great if it does not also reflect a change of choice from traditional at-need revenue which I believe it probably does.

That indicates to me that there probably is a trend moving away from “Traditional” At-Need services to a more “Low Cost” At-Need Services that will continue to happen over time.  And, just like cremation in the USA started with a small percentage of users it eventually grew at a fairly rapid pace over time.  . . . . . And, I think the switch to “Non-Funeral Home Providers” such as Direct Cremation outlets will follow that trend over the next decade and beyond.

The good thing for SCI if that happens is that they are positioned with low-cost cremation providers in their network of operations.  However, it is something to think about for your own traditional funeral home operation.

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

This article from Yahoo Finance will inform you that the major indexes of the American stock market all closed at record highs last Friday.  During the same week the 3rd Quarter of the year closed and the Funeral Director Daily Death Care Index (DCI) reported a close that indicated a 3.60% increase for the year-to-date.

Below you will see a chart of the individual four stocks that make up the Funeral Director Daily DCI Index and how they have performed in comparison to the major indexes for the Year-to-Date (YTD) 2025 up to the end of the 3rd Quarter on September 30 2025.  You will notice that the DCI trails every sector with the possible exception of Consumer Staples for stock price appreciation for YTD 2025.  One possible reason for this, however, is the small sample size of public companies with at least a portion of their business in Death Care.

As you can see funeral home, cemetery, and crematory operators Carriage Services and Service Corporation International have had positive results, as far as stock price apprecition goes,  so far in 2025 while the other two members of the DCI, Matthews International and Security National Financial Corporation have seen their stock price drop during the year.  It’s difficult to know why, but both Matthews International and Security National Financial have other operations outside of Death Care which may be holding back their stock appreciation in what has been, as noticed by the stock index gains, a rather robust period for public stock investors.

Market Segments performance for YTD 2025 up to September 30.  Source:  LPL Research Factset

How About the Long-Term:  Just for the fun of it I went back to October 3, 2015, and looked at price appreciation (as recorded on Yahoo Finance) of the major indexes and also of the stocks that make up the Death Care Index.  If you had had $10,000 of either the index or a particular stock on October 3, 2015 and still held the index or stock, here’s what those indexes or stocks would be worth today (10/03/2025):

• Dow Jones Industrials Index:  $28,502
• Nasdaq Composite Index:  $50,780
• S&P 500 Index:  $34,992

And, here’s a chart of the Death Care Index values for the that hypothetical $10,000 investment as of October 3, 2015:

Related Information:

Disclaimer:  The author of this article for Funeral Director Daily is a shareholder of Service Corporation International, Carriage Services, and Security National Financial Corporation.

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

Matthews International, parent company of Matthews Aurora Casket, Matthews Cremation Solutions, and now Dodge Company, reported its Fiscal Year 3rd Quarter earlier this week.  When you look at the report you have to look at it in somewhat a different way than their report of the 3rd Quarter of 2024.

Since the time of last years 3Q report Matthews has sold the majority of their Brand Solutions segment business SGK into a new entity where Matthews is a minority partner.  They used some of those proceeds to pay down debt of about $120 million, and in 2025 their Memorialization segment purchased the well-known and popular Dodge Company.

In addition, Matthews International has been dogged by at least one large stockholder, Barrington Capital, to improve their operations.  Partly because of that, Matthews has embarked on a “Strategic Alternative Evaluation” that is supported by J.P. Morgan and according to the 3rd Quarter report “has identified several alternatives for further evaluation and consideration toward improving shareholder value and better alignment with the underlying value of the organization”.

So, when you look at the sales for 3Q25 as compared to 3Q24 it is difficult to have a comparison because of the changes to Matthews businesses.  With the sale of the SGK unit, sales for the consolidated Matthews International enterprises have dropped over 18% from 3Q24’s number of $427.8 million to this year’s 3Q total sales of $349.3 million.

However, even subtracting the reported $57.1 million gain on the sale of the SGK business in the 3rd Quarter, Operating Profits for Matthews increased for the comparable quarters from $6.7 million in 3Q24 to about $18 million in 3Q25.  And, net income improved from just under 2.0 million in 3Q24 to $15.3 million in 3Q25.

As for the Memorialization segment on its own, Revenue slightly increased from $202.6 million in 3Q24 to $203.7 million in 3Q25.  Here’s what Matthews CEO and President Joseph C. Bartolacci said about the Memorialization segment in prepared statements from the 3Q25 press release which you can read here:

“Sales for the Memorialization segment for the fiscal 2025 third quarter were higher than a year ago primarily reflecting the recent acquisition of The Dodge Company. We expect this acquisition to be nicely accretive to earnings as we leverage the benefits of our Memorialization commercial platform and we have already begun to realize synergies from integration. Sales volumes for caskets and cemetery memorials were modestly lower for the quarter primarily reflecting lower U.S. casketed deaths and the prior year sales benefit of granite backlog reductions. However, the earnings impact of these declines were offset by inflationary price realization and benefits from the segment’s ongoing productivity initiatives, which were significant factors in the segment’s improved operating margins.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I think the moves Matthews International has been making since shareholders issued some concern are good for the greater well-being of the company.  My personal opinion has been that, like some companies do, Matthews got excited about certain segments of their operation that they believe had or maybe still have great promise.  However, when turning attention to those segments they may have forgotten how the company was built to begin with — with the Memorialization segment.

I now think the Memorialization segment will take on even greater importance with the addition of Dodge Company products to the Matthews toolbox.  The “in” with current Dodge Chemical customers may allow the Matthews Memorialization sales department to make an inroads with caskets, cremation products, and cemetery products of those current Dodge customers who are not current Matthews customers.  The first-year sales trips to see those customers and introduce them to Matthews products will be very important.

When you look at the consolidated sales of the company in 3Q25 you will see that the Memorialization segment of the company now produces 58.3% of their sales.  That is in comparison to a year ago when the Memorialization segment contributed 47.4% to company sales —  that was prior to the SGK sale and the Dodge Company acquisition.

An interesting note about Matthews International stock —  In the past year Matthews International raised their dividend 4 cents per share to an even $1.00 per share on an annual basis.  That increase marks the 30th consecutive year that Matthews raised their dividend payout to shareholders.  With a stock price of $25.52 per share as I write this on Wednesday, August 6, that works out to a dividend yield of 3.92% annually.

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

Service Corporation International (SCI) reported their 1st Quarter 2025 financial results last week and in doing so showed an overall revenue increase of 2.8% in year over year results.  Total Revenue for the quarter was $ 1.074.2 billion as compared to the 1st Quarter of 2024 which came in at $ 1.045.4 billion.

Those revenue numbers led to an overall improvement in Operating Income of about $ 19 million for the quarter.  The operating income margin also improved to 23.4% from the 1Q2024 mark of 22.2%.

Tom Anderson
Funeral Director Daily

In my opinion, what was really strong for the company was the performance of the funeral side of the business.  In what SCI terms “Comparable Funeral Results” — a term for a comparison of the funeral side of businesses that were operating in both comparable quarters — revenues increased a total of 3.9%.  The actual numbers were revenue of $ 625.9 million in 1Q25 as compared to revenues of $ 602.6 million in 1Q24.  (Comparable results don’t include revenue from new acquisitions or disposed of properties)

And, it was a “double-barrel” increase as both the number of services performed increased as did the revenue per service.  SCI reported that the number of services performed in 1Q25 was 95,624 as compared to the number in 1Q24 of 93,967 — a 1.8% increase.

They also reported that the revenue per service grew 2.3% from $ 5,613 per service in 1Q24 to $ 5,743 per service in 1Q25 — that’s an increase of 2.3%

Tom Ryan
SCI CEO

Here’s what SCI CEO Thomas Ryan said in a prepared statement from the 1Q2024 Earnings press release which you can access here, “This was driven by strong performance in our funeral segment with year over year increases in the number of services performed and average revenue per funeral . . . .  . Additionally, effective cost management drove solid gross profit performance and margin expansion.” 

On the flip side of that report, the “Comparable Cemetery” results were not as impressive.  Revenue, gross profit, and gross profit margin all declined from what was reported one year ago in 1Q2024.  The numbers for those categories in 1Q2025 were reported as such:

• Comparable Cemetery Revenue :  $ 432.9 million (Compared to $440.7 million in 1Q2024)
• Comparable Cemetery Gross Profit:  $ 136.8 million (Compared to $142.6 million in 1Q2024)
• Comparable Cemetery Gross Profit Margin:  31.6% (Compared to 32.4% in 1Q2024)

Here’s what CEO Ryan said in a prepared statement that was aimed at the cemetery segment, “In the cemetery segment, we are continuing to focus on production, which will benefit us in future periods, as undeveloped property sold is constructed.”

It should also be noted that Preneed production mostly slipped in 1Q2025 also.  However, it should be pointed out that the preneed sales staff is in the process of moving from a trust based system where some revenue is counted upon early delivery to an insurance based product, with their new alliance with Global Atlantic Insurance, where most of the revenue will not be counted until delivery at need.

I think it will be very difficult to comprehend how the actual preneed numbers are for SCI until they have at least one full year of comparables in the insurance-based operating model under their belts.  At this point they are, in my opinion, in a transitionary process.

On preneed however, SCI did report average preneed contracts moving up 1.1% in dollar volume.  One might wonder, however, if that actually portends a trend of less services being purchased in the future because 1.1% is certainly not keeping up with inflation.

Finally, in CEO Ryan’s opening statement he did mention acquisitions.  Here’s what he said on that subject, “. . . our robust cash flow has allowed us to continue investment toward our extensive pipeline of acquisitions while also providing us the flexibility to be opportunistic with stock repurchases.”

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”

Matthews International, which provides memorialization products and cremation solutions among its multi-faceted business segments announced their Fiscal 4th Quarter and Fiscal Year End results last Thursday.  Matthews operates on a fiscal year that ends on September 30 of each year.

While the company had some positive attributes for the quarter such as reducing company debt by $53.8 million, Sales and Adjusted EBITDA for the company both declined for the quarter and the year end in comparison to last year for the same time periods.  As a company, 4th Quarter 2024 Revenues totaled about $446.6 million for the quarter as compared to $480.1 million for 4Q23 — that’s a decrease of about 7%.  For the Fiscal Year ending September 30, 2024, Total Revenues totaled $1.79 billion as compared to FY2023’s number of $1.88 billion — that’s a yearly decrease in sales of about 4.8%.

Total Adjusted EBITDA for the company dropped to $205.1 million for the year compared to 2023’s Fiscal Year total of $225.8 million — a drop of about 9.2% on the year.

Matthews operates in three segments — one of which is the Memorialization Segment which includes cemetery products, caskets, and cremation products.  That segment is the largest, by sales of the three segments and accounted for about 46% of company sales.  It did, however, see a reduction in annual sales from $842 million in FY23 to $829 million in FY24 — a drop of about 1.6%.  The segment’s Adjusted EBITDA almost kept up with last years and can be basically called “flat” for the year — it actually dropped by less than 1%. . . from $163.9 million to $162.5 million.

Here’s what Matthews International President and CEO Joseph C. Bartolacci said in prepared statements in the press release about the Memorialization Segment, “The Memorialization segment reported higher adjusted EBITDA for the current quarter despite lower unit volumes, which were related to a decline in U.S. deaths compared to a year ago. Ongoing cost control efforts combined with improved price realization were the key drivers in the improvement in operating margins. . . . .We expect another solid performance for our Memorialization business in fiscal 2025 as U.S. deaths appear to have generally normalized following COVID and we are projecting continued growth in our cremation-related products sales.” 

You can access the Matthews International November 21, 2024, press release here.

Stock Price Rises:  Interestingly enough, on the news of lower quarterly and annual sales and profits, Matthews International stock price jumped almost 21% on Friday after Thursday’s market closed press release.  Matthews International stock closed at $30.84 per share after opening that day at $25.49.

It’s difficult for one to read into why the value went up over 20% in one day, but the company’s earnings press release did show the SGK Brand Solution Segment gaining sales and the situation of retiring over $53 million of debt.

It could also have to do with the Industrial Technologies Segment of the company and opportunities there.   Here’s an interesting statement that President/CEO Bartolacci included in the earnings press release, “Lastly, as growth opportunities for the Industrial Technologies segment continue to emerge, the Company has been exploring strategies with respect to its portfolio of businesses.   Accordingly, we have retained J.P. Morgan to support the evaluation of potential strategic alternatives.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  This is total speculation on my part but, it’s interesting for me to see the stock price jump to over $30 per share on Friday after not closing at that level since March 2024.  I think the terms “potential strategic alternatives” lead to speculation by many that there could be acquistions on the horizon by Matthews or there could be a divestiture of one of the Matthews segments to come.  Again, from my point of view there is plenty of money in the private equity circles looking to invest.

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

Funeral Director Daily published an article on Security National Financial Corporation’s 3rd Quarter 2024 results on Monday using the company’s November 14, 2024, Form 10-Q as our guidance as no press release had been issued from SNFC at that time.

Later on November 18, a press release on the earnings from SNFC was released and, as promised, we publish that information today.  You can access that press release here.

The company reported that 3rd Quarter Revenues were at $88.2 million, up from $80.2 million for the same time period of 2023 and “Earnings Before Taxes” for the 9-month period ended September 30, 2024 were $15.2 million as compared to $5.1 million for the first 9-months of 2023.

Here’s what Scott M. Quist, President of the company, said in prepared remarks in that press release, “It should be noted that for the 9 months our Mortgage Segment has improved its profitability by $9.4 million dollars, reflecting significant expense-reduction work along with the improved revenues. Our Life Insurance Segment revenues are arguably flat, being up only 3.8%, but the Life Insurance Segment’s profitability improved over 40% to $28 million dollars. Driving that profitability increase were decreasing death claims, including a return to more normal age distributions following COVID, and a decrease in the amortization of deferred acquisition costs which is related to the improved profit margins on our products.”

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

You can access the report on Service Corporation International’s (SCI) 3rd Quarter of 2024 here.  When you do, I’m of the opinion that you will see it looks pretty much like the 3rd Quarter of 2023.

Here’s a couple of Top-Line highlights as presented early in the report by SCI:

• Revenue grew $12.1 million over the third quarter of 2023
• Earnings per share was $0.81 compared to $0.80 in the third quarter of 2023
• Adjusted earnings per share was $0.79 compared to $0.78 in the third quarter of 2023

And, here is what Tom Ryan, SCI’s Chairman and CEO said in prepared remarks in the presentation, “. . .  We are excited to see the positive impact in funeral revenue from our new marketing agreement with our new preferred preneed insurance provider, which launched during the quarter. Additionally, we are pleased both funeral and cemetery gross profit were relatively stable versus the prior year third quarter with modest revenue growth reflecting our continued focus on managing fixed costs.”

CEO Ryan also made mention of some impressive activity in the acquisition market for SCI when he made these prepared comments, “We also had a very active quarter on the acquisition front including premier locations in major metropolitan markets. We invested $123 million adding 10 funeral homes and 2 cemeteries, including one combination location.” 

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  In doing some of the math, the $12.1 million improvement in top-line revenue on top of 2023’s 3Q revenue amounts to a 1.2% increase in revenue.

Operating Income came in for 3Q24 at $212.4 million in comparison to a number of $223.0 million in 3Q23 (one year ago).  That’s an approximate additional 1.26% of margin loss to revenue for this quarter as compared to last year – and in raw numbers about $10.5 million.  So, from my point of view, the slight increase in revenue for the quarter was virtually offset by slightly lower margins  — most likely caused by continuing inflationary issues.

Looking at another metric to somewhat strenghen this point, the company’s “Cost of Revenue” line item increased to $761 million for 3Q 2024 as compared to $748 million in 3Q 2023.  That’s a $13 million difference and virtually even to the increase in revenue ($12.1 million) for the quarter.

Again, from my point of view, that issue of “inflationary costs” seems to be the issue that is troubling traditional funeral homes at this time. . . . They are getting some increases in top-line revenue — SCI’s “Consolidated Funeral Segment Revenue per Service” jumped to $5,669 in 3Q24 as compared to $5,605 in 3Q23, but that increase is virtually taken up by higher costs of doing business.

On that same point, SCI’s 9-month numbers for “Consolidated Funeral Segment” ending September 30, 2024, show that their “Gross Profit Percentage was at 19.6% of Revenue”.  That’s a 2% decrease over the same period of 2023 which is listed as 21.7% of Revenue. . . . . and basically tells a person that for every $100 brought in in Revenue that it is costing the company $2 more dollars to provide service on that revenue this year over last year.

Putting that number into perspective for the family funeral home owner.  If your experience with inflationary costs is the same as SCI is realizing, then a funeral home that does $1 million in revenue annually will have approximately $20,000 in additional inflationary costs to service that revenue than they did the year before. . . . That’s $20,000 that could have been paid in wages, or given out in profit-sharing, or reducing debt principal. . . In essence, inflationary costs are reducing one’s options of how they (owners) can use that revenue resource.

There’s always more numbers that we could discuss and disect, but I think what individual funeral home operators need to take from this report is that controlling costs are difficult for everybody at this time. . . .even those companies that go around with efficiency experts looking at operations.  And, until this inflationary spiral is brought under control traditional funeral home profits may be depressed unless they can find a way to add death calls or market share.

Two final things to watch for the future:  In the part of the report that SCI calls “Comparable Funeral Services Performed”, the only type of service that increased in death call numbers was what they call “Non-funeral home”.  The company defines “Non-Funeral Home” as “Non-funeral home revenue represents services sold on a preneed or atneed contract through one of our non-funeral home sales channels (e.g. SCI Direct) and performed once death has occurred.”

The number of “Core Funerals Performed” dropped by 1.1%.  Here’s how SCI defines “Core Funerals”  —  “Core revenue represents the sum of merchandise and services sold on an atneed contract or preneed contract, which were delivered or performed once death has occurred through our core funeral homes.

Finally, SCI reports that its Total Comparable Cremation rate has increased to 63.7% of services for 3Q2024 as compared to 63.3% for the same period one year ago.

Disclaimer — The author of this article for Funeral Director Daily holds a stock position in Service Corporation International.

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