[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Consolidated Financial Statements for the quarter ended March 31, 2025, covering Balance Sheets, Statements of Operations, Cash Flows, and Stockholders' Equity, with accompanying notes Consolidated Statement of Operations Highlights (Q1 2025 vs Q1 2024) | Financial Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $107,069 | $103,493 | +3.4% | | **Gross Profit** | $37,842 | $37,262 | +1.6% | | **Operating Income** | $31,564 | $19,477 | +62.1% | | **Net Income** | $20,926 | $6,973 | +200.1% | | **Diluted EPS** | $1.34 | $0.45 | +197.8% | Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $49,900 | $44,536 | | **Total Assets** | **$1,275,229** | **$1,279,580** | | Total Current Liabilities | $52,511 | $58,041 | | **Total Liabilities** | **$1,052,167** | **$1,071,030** | | **Total Stockholders' Equity** | **$223,062** | **$208,550** | Consolidated Statement of Cash Flows Highlights (Q1 2025 vs Q1 2024) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $13,792 | $19,703 | | Net Cash from Investing Activities | $15,497 | $7,372 | | Net Cash from Financing Activities | ($25,811) | ($26,909) | [Condensed Notes to Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies and financial statement line items, covering business structure, divestitures, goodwill, debt, lease obligations, and segment reporting - The company operates **160 funeral homes** and **28 cemeteries**, with Funeral Home Operations accounting for approximately **70% of total revenue** and Cemetery Operations for about **30%**[20](index=20&type=chunk) - In Q1 2025, the company sold two funeral homes and three cemeteries for an aggregate of **$15.8 million**, resulting in a net gain of **$5.9 million**[46](index=46&type=chunk) - Goodwill decreased from **$414.9 million** at year-end 2024 to **$410.7 million** at March 31, 2025, primarily due to a **$4.2 million** allocation of goodwill to divested businesses[44](index=44&type=chunk) Debt and Lease Obligations (March 31, 2025) | Obligation Type | Carrying Value (in thousands) | | :--- | :--- | | Credit Facility | $118,470 | | Senior Notes | $396,774 | | Operating Lease Liabilities | $16,275 | | Finance Lease Liabilities | $9,942 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, highlighting revenue and net income growth, key company developments, liquidity, capital resources, and segment operational results, attributing success to pricing strategy and cost management [Overview & Company Developments](index=37&type=section&id=Overview%20%26%20Company%20Developments) This section outlines significant corporate events in early 2025, including new executive appointments and the continuation of the company's divestiture program - Effective January 2, 2025, **John Enwright** was appointed as the company's new **Senior Vice President, Chief Financial Officer, and Treasurer**[153](index=153&type=chunk) - On February 24, 2025, **Donald D. Patteson, Jr.** was elected **Non-Executive Chair of the Board**, and **Dr. Edmondo Robinson** was elected **Chair of the Audit Committee**[154](index=154&type=chunk)[155](index=155&type=chunk) - During Q1 2025, the company sold two funeral homes and three cemeteries for **$15.8 million**, resulting in a **$5.9 million gain**, and sold additional real property for **$2.9 million**, resulting in a **$2.0 million gain**[156](index=156&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from operations and its credit facility, with Q1 2025 cash from operations decreasing due to working capital changes, and capital priorities focused on debt repayment, dividends, and internal growth - Cash provided by operating activities decreased to **$13.8 million** in Q1 2025 from **$19.7 million** in Q1 2024, mainly due to unfavorable working capital changes[169](index=169&type=chunk) - Net cash provided by investing activities was **$15.5 million**, driven by **$18.7 million** in proceeds from divestitures and asset sales[168](index=168&type=chunk)[170](index=170&type=chunk) - The company made net payments of **$17.1 million** on its Credit Facility, acquisition debt, and finance leases during Q1 2025[173](index=173&type=chunk) - As of March 31, 2025, the company had **$120.0 million** in outstanding borrowings and **$127.8 million** of availability under its Credit Facility[183](index=183&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) This section analyzes Q1 2025 segment performance, detailing revenue growth in Funeral Home and Cemetery segments, and attributing overall net income increase to divestiture gains and reduced G&A expenses Financial Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Total Revenue | $107,069 | $103,493 | | Funeral Contracts | 12,172 | 12,091 | | Avg. Revenue per Funeral Contract | $5,710 | $5,580 | | Preneed Interment Rights Sold | 3,236 | 3,437 | | Avg. Price per Preneed Interment Right | $5,419 | $4,849 | - Funeral Home operating revenue increased by **$3.0 million**, driven by a **2.3%** increase in average revenue per contract and a **0.7%** increase in volume[204](index=204&type=chunk) - Cemetery operating revenue increased by **$1.5 million**, driven by an **11.8%** increase in the average price per interment right sold, which offset a **5.8%** decrease in sales volume[208](index=208&type=chunk) - General, administrative and other expenses decreased by **$4.2 million**, primarily due to a **$4.3 million** decrease in salary and incentive costs related to a former executive's termination agreement in Q1 2024[215](index=215&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations on variable-rate debt and market value changes in trust securities, with a 100 basis point rate change impacting income by $1.2 million, while fixed-rate Senior Notes mitigate some exposure - The company is primarily exposed to **interest rate risk** on its **Credit Facility** and **market value risk** on securities in its **trust funds**[221](index=221&type=chunk) - Assuming the outstanding balance on the Credit Facility remains unchanged, a **100 basis point (1%)** change in the borrowing rate would result in a **$1.2 million** change in income before taxes[225](index=225&type=chunk) - The **$400 million** Senior Notes bear a fixed interest rate of **4.25%**, so changes in market interest rates do not affect interest costs but do affect the notes' fair value, which was **$364.4 million** at March 31, 2025[226](index=226&type=chunk)[227](index=227&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the company's principal executive and financial officers concluded that disclosure controls and procedures were **effective**[229](index=229&type=chunk) - There were **no changes** in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[230](index=230&type=chunk) [PART II – OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal proceedings, including two class action lawsuits, which are not expected to have a material adverse effect - The company is party to a number of legal proceedings from the ordinary course of business, which are **not expected to have a material adverse effect** on its financial statements[233](index=233&type=chunk) - **Two class action lawsuits** have been filed against the company and its subsidiaries in California: a wage and hour case (Denning v. Carriage) and a consumer case related to cemetery maintenance (Frost v. Rolling Hills)[235](index=235&type=chunk)[236](index=236&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section supplements existing risk factors by adding a specific risk concerning U.S. foreign trade policies, highlighting potential adverse effects from tariffs and trade barriers on costs and supply chain - A **supplemental risk factor** was added regarding changes in **U.S. foreign trade policies**, including **tariffs and trade barriers**[237](index=237&type=chunk)[238](index=238&type=chunk) - The company warns that such policies could lead to **inflationary pressures**, **increase the costs of goods** offered to customers, and **negatively impact the supply chain** for merchandise[238](index=238&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's Q1 2025 share repurchase activity, noting no repurchases under the public program and **$48.9 million** remaining authorized for future repurchases Share Repurchase Activity (Q1 2025) | Period | Total Shares Purchased | Average Price Paid ($) | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $0.00 | 0 | | Feb 2025 | 170,726 | $40.00 | 0 | | Mar 2025 | 0 | $0.00 | 0 | - As of March 31, 2025, the company had **$48,898,769** remaining under its authorized share repurchase program[239](index=239&type=chunk) [Other Disclosures and Exhibits](index=50&type=section&id=Other%20Disclosures%20and%20Exhibits) This section confirms no defaults on senior securities, no mine safety disclosures, no Rule 10b5-1 trading arrangement changes by directors or officers, and refers to the Index of Exhibits - Item 3 (Defaults Upon Senior Securities) and Item 4 (Mine Safety Disclosures) are **not applicable**[240](index=240&type=chunk)[241](index=241&type=chunk) - During the fiscal quarter ended March 31, 2025, **no director or officer adopted or terminated any Rule 10b5-1 trading arrangements**[242](index=242&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $107.1 million, an increase of $3.6 million or 3.5% compared to the same quarter last year [8] - GAAP net income was $20.9 million, an increase of $13.9 million or 200.1% year-over-year [21] - Adjusted diluted EPS for the first quarter was $0.96 per share, an increase of $0.21 or 28% compared to the prior year quarter [12] Business Line Data and Key Metrics Changes - Total funeral operating revenue was $69.1 million, an increase of $3 million or 4.6% year-over-year, driven by a 1.8% increase in average revenue per contract and a 2.4% increase in admin volume [8][9] - Total cemetery revenue reached $27.9 million, an increase of $1.5 million or 5.8% [10] - Financial revenue was $7.4 million, an increase of $613,000 or 9.1%, primarily from preneed insurance funeral sales [11] Market Data and Key Metrics Changes - The company observed a shift in flu season affecting volume, with a positive variance of 7.7% compared to the first quarter of the previous year [9] - The preneed cemetery growth rate is expected to be between 10% to 20% for the year [10] Company Strategy and Development Direction - The company is focused on disciplined execution and strategic initiatives, including the implementation of the Trinity system and supply chain optimization [15][16] - The company aims to maintain its current guidance while monitoring economic conditions, with potential adjustments based on performance in the second quarter [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the strength of its financial strategy, despite broader economic uncertainties [13][14] - The company plans to reinvest proceeds from divestitures into higher quality EBITDA-producing businesses, with expectations for acquisitions in the second half of the year [41][43] Other Important Information - Adjusted consolidated EBITDA for the first quarter was $32.9 million, a decrease of $653,000 or 1.9% [11] - Overhead expenses decreased to $15.3 million from $19.4 million in the prior year, with adjusted overhead as a percentage of revenue at 14.3% [24][25] Q&A Session Summary Question: How was March and April performance? - Management indicated that momentum has continued strongly from January through April, primarily due to volume increases [28][29] Question: Does the strength year-over-year suggest the COVID hangover is behind? - Management noted it is challenging to forecast but believes this year will level up and potentially increase volume moving forward [30][32] Question: What is attributed to the decline in preneed and terming rates sold? - Management attributed the decline to delays in available inventory at premier cemeteries rather than discretionary spending [34][36] Question: What are the expected proceeds from property monetization in Q2? - Expected proceeds from property monetization in Q2 are around $6 million, which is factored into guidance [62][63] Question: How does the company plan to react in a recessionary environment? - Management expressed confidence in the resilience of the industry and plans to accelerate lead generation programs to maintain growth [55][57]

Financial Data and Key Metrics Changes - For the first quarter, total revenue was reported at $107.1 million, an increase of $3.6 million or 3.5% compared to the same quarter last year [9] - GAAP net income for the first quarter was $20.9 million, an increase of $13.9 million or 200.1% [22] - Adjusted diluted EPS for the first quarter was $0.96 per share, an increase of $0.21 or 28% compared to the prior year quarter [13] - Adjusted consolidated EBITDA was $32.9 million, a decrease of $653,000 or 1.9% [12] Business Line Data and Key Metrics Changes - Total funeral operating revenue was $69.1 million, an increase of $3 million or 4.6% year-over-year, driven by a 1.8% increase in average revenue per contract and a 2.4% increase in admin volume [9] - Total cemetery revenue reached $27.9 million, an increase of $1.5 million or 5.8% [11] - Financial revenue was $7.4 million, an increase of $613,000 or 9.1%, primarily from preneed insurance funeral sales [12] Market Data and Key Metrics Changes - The company observed a shift in flu season, impacting volume expectations, with a positive variance of 7.7% compared to the first quarter of the previous year [10] - The preneed cemetery growth rate is expected to be between 10% to 20% for the year [11] Company Strategy and Development Direction - The company is maintaining its current guidance while monitoring economic conditions, with plans to potentially raise guidance if momentum continues [14][15] - The Trinity system is in Phase one of implementation, focusing on back office systems, with Phase two expected to begin in the third quarter [16] - The company is excited about the rollout of its express funeral funding partnership, aimed at improving family financial flexibility and unlocking new sales potential [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the strength of its financial strategy, despite broader economic uncertainties [14][19] - The company is focused on operational excellence and innovation to create lasting value for shareholders [20] Other Important Information - Cash provided by operating activities for the quarter was $13.8 million, down from $19.7 million in the prior year [23] - The company ended the quarter with a maintained leverage ratio of 4.2 times, down from 5 times [24] Q&A Session Summary Question: How was March and April performance? - Management indicated that momentum has continued strongly from January through April, primarily due to volume increases [30][31] Question: What is the outlook for preneed and terming rates sold? - Management noted that while there was a decline in preneed property rights sold, they expect a return to normal growth rates starting in the second quarter [34][35] Question: What are the expected proceeds from property monetization in Q2? - Management estimated around $6 million in proceeds from property sales in Q2, which is factored into guidance [56] Question: How does the company plan to react in a recessionary environment? - Management expressed confidence in the resilience of the industry, noting that demand remains stable even during economic downturns [51][52] Question: What cost-saving measures are currently in place? - Management highlighted ongoing supply chain initiatives and fleet management as key areas for cost savings [47][48]

Group 1: Earnings Performance - Carriage Services (CSV) reported quarterly earnings of $0.96 per share, exceeding the Zacks Consensus Estimate of $0.80 per share, and up from $0.75 per share a year ago [1] - The earnings surprise for this quarter was 20%, following a previous quarter where earnings of $0.62 per share surpassed expectations of $0.51 per share by 21.57% [2] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - The company posted revenues of $107.07 million for the quarter ended March 2025, which was 4.72% above the Zacks Consensus Estimate and an increase from $103.49 million year-over-year [3] - Carriage Services has also topped consensus revenue estimates in each of the last four quarters [3] Group 3: Stock Performance and Outlook - Carriage Services shares have increased approximately 1.3% since the beginning of the year, contrasting with a decline of 5.5% in the S&P 500 [4] - The future performance of the stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][5] - The current consensus EPS estimate for the upcoming quarter is $0.76 on revenues of $100.31 million, and for the current fiscal year, it is $3.21 on revenues of $407.85 million [8] Group 4: Industry Context - The Funeral Services industry, to which Carriage Services belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [9]

Carriage Services Announces First Quarter 2025 Results Conference call on Thursday, May 1, 2025 at 8:00 a.m. Central Time HOUSTON - April 30, 2025 - (GLOBE NEWSWIRE) Carriage Services, Inc. (NYSE: CSV) today announced its financial results for the first quarter ended March 31, 2025. Company Highlights: Carlos Quezada, Vice Chairman and CEO, stated, "We are proud of our first-quarter results, which reflect the strength of our strategy and execution discipline. Our solid financial performance, highlighted by ...

Core Insights - Carriage Services, Inc. reported strong financial results for Q1 2025, with a 4.6% increase in comparable funeral home revenue driven by a 2.4% rise in at-need volume and a 2.2% increase in average revenue per at-need contract, resulting in adjusted diluted EPS of $0.96, a 28% increase from the previous year [3][5][12] Financial Highlights - Total revenue for Q1 2025 was $107.1 million, a 3.5% increase from $103.5 million in Q1 2024, primarily due to an 11.8% increase in the average price per preneed interment rights sold and a 7.4% increase in total preneed sales [4][5][12] - Operating income rose to $31.6 million with an operating income margin of 29.5%, compared to $19.5 million and 18.8% in the prior year [4][5] - Net income increased by $14.0 million or 200.1% year-over-year, reaching $20.9 million, with diluted EPS of $1.34 compared to $0.45 in the prior year [5][19] - Adjusted consolidated EBITDA was $32.9 million with a margin of 30.8%, slightly down from $33.6 million and 32.5% in the previous year [4][14] Operational Metrics - The company sold 3,100 preneed interment rights at an average price of $5,490, up from $4,985 in the previous year [4][12] - Funeral contracts increased to 12,055 from 11,773 year-over-year, reflecting a 2.3% increase in average revenue per contract [4][5] Outlook for 2025 - The company anticipates total revenue between $400 million and $410 million for 2025, with adjusted consolidated EBITDA projected at $128 million to $133 million and adjusted diluted EPS expected to be between $3.10 and $3.30 [8][9][44] - The outlook includes the impact of divesting non-core assets, which is expected to reduce revenue and adjusted consolidated EBITDA by approximately $7.9 million and $2.3 million, respectively [8][9]

Core Viewpoint - Carriage Services, Inc. is set to release its first quarter 2025 financial results on April 30, 2025, followed by a conference call on May 1, 2025, at 8:00 a.m. Central Time [1][2] Company Overview - Carriage Services is a prominent provider of funeral and cemetery services and merchandise in the United States, operating 160 funeral homes across 25 states and 28 cemeteries in 10 states [3] - The company focuses on delivering premier experiences through innovation, partnership, and elevated service [3]

Core Viewpoint - Carriage Services, Inc. (NYSE: CSV) is a funeral and cemetery provider that was last analyzed in October 2023, prior to its third-quarter earnings report scheduled for October 30, 2024. The company maintains a 'Hold' rating due to its current valuation and market conditions [1]. Company Summary - The company focuses on generating income through investments in undervalued profitable stocks with strong balance sheets and minimal debt [1]. - The investment strategy includes writing calls against positions to generate additional income when opportunities arise [1]. - Risk management is emphasized through position sizing and the use of trailing stop losses over time [1].

Core Insights - The article emphasizes the importance of efficiency ratios in evaluating a company's potential for profitability and stock selection [1] Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a high ratio indicating effective collection practices [2] - **Asset Utilization**: This ratio assesses how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold, with high values reflecting efficient inventory management [4] - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses relative to sales, with higher values indicating better expense management [5] Screening Criteria - The screening process included a favorable Zacks Rank of 1 (Strong Buy) alongside the efficiency ratios to identify potentially profitable stocks [6] - The criteria narrowed down over 7,906 stocks to nine, highlighting companies with efficiency ratios above industry averages [7] Selected Companies - **Carriage Services (CSV)**: A leading provider of death care services in the U.S. with an average four-quarter earnings surprise of 27.5% [7] - **Brinker International (EAT)**: Operates various restaurant brands, including Chili's and Maggiano's, with an average four-quarter earnings surprise of 24.7% [8] - **Flexsteel Industries (FLXS)**: Engaged in the design and manufacture of upholstered furniture, with an average four-quarter earnings surprise of 19.8% [10]

Markets showed signs of a recovery on Wednesday after soft inflation data somewhat eased concerns about a declining economy. However, the crisis is far from over as global tensions, President Donald Trump’s tariffs and uncertainty over the next rate cut persist, which could keep markets volatile.Given this situation, it would be safe to invest in consumer staples stocks, which are considered defensive. In this regard, Molson Coors Beverage Company (TAP) , Carriage Services, Inc. (CSV) and Tyson Foods (TSN) ...