Financial Performance - Total revenue for Q1 2025 was $107.1 million, representing a 3.5% increase compared to $103.5 million in Q1 2024[5] - GAAP net income grew by $14.0 million or 200.1% year-over-year, reaching $20.9 million in Q1 2025[4] - Adjusted diluted EPS increased to $0.96, up 28% from $0.75 in the prior year quarter[4] - Comparable funeral home revenue rose by 4.6%, driven by a 2.4% increase in at-need volume and a 2.2% increase in average revenue per at-need contract[3] - Total revenue for Q1 2025 was $107.069 million, a 3.1% increase from $103.493 million in Q1 2024[17] - Net income for Q1 2025 was $20.926 million, compared to $6.973 million in Q1 2024, representing a 200.5% increase[17] - Basic earnings per share increased to $1.35 in Q1 2025 from $0.46 in Q1 2024[17] - Operating income for Q1 2025 was $31.564 million, up from $19.477 million in Q1 2024, marking a 62% increase[17] - The company reported a gross profit of $37.842 million in Q1 2025, compared to $37.262 million in Q1 2024, a 1.6% increase[17] - Consolidated EBITDA for Q1 2025 was $32,948,000, compared to $26,971,000 in Q1 2024, reflecting a year-over-year increase of 22.1%[34] - Adjusted consolidated EBITDA margin for Q1 2025 was 30.8%, down from 32.5% in Q1 2024[34] Revenue Projections - The company expects total revenue for 2025 to be between $400 million and $410 million, factoring in divestitures[7] - Adjusted consolidated EBITDA for 2025 is projected to be between $128 million and $133 million[7] - The company expects total revenue for the year ending December 31, 2025, to be approximately $405,000,000, with an adjusted consolidated EBITDA margin of 32.3%[39] - The company anticipates cash provided by operating activities for the year ending December 31, 2025, to be $61,500,000[41] Asset and Liability Management - Total current assets rose to $49.900 million as of March 31, 2025, up from $44.536 million at the end of 2024, a 12.5% increase[16] - Total liabilities decreased to $1,052.167 million as of March 31, 2025, down from $1,071.030 million at the end of 2024, a reduction of 1.8%[16] - Cash and cash equivalents increased significantly to $4.643 million at the end of Q1 2025, compared to $1.165 million at the end of 2024[19] Cash Flow and Dividends - Cash flows from operating activities were $13.792 million in Q1 2025, down from $19.703 million in Q1 2024[19] - The company declared dividends of $0.1125 per share for both Q1 2025 and Q1 2024, maintaining the same level[17] - Adjusted free cash flow for Q1 2025 was $18,536,000, compared to $13,352,000 in Q1 2024, representing an increase of 39.1%[38] Strategic Initiatives - The company plans to divest certain non-core assets, which is expected to reduce 2025 revenue and adjusted consolidated EBITDA by approximately $7.9 million and $2.3 million, respectively[6] - The company has identified strategic alternatives and is reviewing potential acquisitions to enhance growth and market share[42] Risk Factors and Forward-Looking Statements - Investors are advised to review the "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2024, for material factors that could affect actual results[44] - The company does not undertake any obligation to publicly update or revise forward-looking statements except as required by law[44] Debt Management - The leverage ratio improved to 4.2x from 5.0x year-over-year, following a $17.0 million debt repayment[4] Pricing and Sales Trends - The average price per preneed interment right sold increased by 11.8% to $5,490, despite a 5.8% decrease in the number sold[5]

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]

Core Insights - Markets are showing signs of recovery due to soft inflation data, but concerns remain regarding global tensions, tariffs, and uncertainty over interest rate cuts [1][4][6] Consumer Staples Stocks - Investing in consumer staples stocks is recommended as they are considered defensive; notable picks include Molson Coors Beverage Company (TAP), Carriage Services, Inc. (CSV), and Tyson Foods (TSN) [2][3] - These stocks have a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [2] Inflation Data - The consumer price index (CPI) rose 0.2% sequentially in February, lower than the expected 0.3%, and year-over-year CPI increased 2.8%, below the anticipated 2.9% [4][6] - Core CPI, excluding food and energy, also rose 0.2% sequentially and 3.1% year-over-year, both below consensus estimates [5] Federal Reserve's Stance - The Federal Reserve has halted rate cuts due to persistent inflation, maintaining interest rates in the range of 4.25-4.5% [7] - The Fed is expected to adopt a cautious approach, with fewer rate cuts anticipated in 2025, possibly just a single 25 basis point cut in the second half of the year [8] Tariff Impacts - President Trump's tariffs have raised concerns about a potential global trade war, with 25% tariffs on Canadian and Mexican imports and 10% tariffs on Chinese goods [9][10] - These tariffs have contributed to market volatility, which is expected to continue until clarity on tariff policies is achieved [10] Company Profiles Molson Coors Beverage Company (TAP) - TAP has a diverse portfolio of brands and an expected earnings growth rate of 6.5% for the current year, with a Zacks Consensus Estimate improvement of 6.4% over the past 60 days [11][12] - The company has a beta of 0.81 and a current dividend yield of 3.11% [13] Carriage Services, Inc. (CSV) - CSV is a leading provider of death care services in the U.S., with an expected earnings growth rate of 21.1% for the current year and a Zacks Consensus Estimate improvement of 13.8% over the past 60 days [14][15] - The company has a beta of 0.91 and a current dividend yield of 1.18% [15] Tyson Foods (TSN) - TSN is the largest U.S. chicken company, with an expected earnings growth rate of 23.6% for the current year and a Zacks Consensus Estimate improvement of 8.8% over the past 60 days [16][17] - The company has a beta of 0.72 and a current dividend yield of 3.26% [17]

Core Viewpoint - Carriage Services, Inc. has announced an expanded national partnership with Express Funeral Funding, aiming to enhance service delivery and provide more funding options for families [1][2][3] Company Overview - Carriage Services operates 162 funeral homes across 26 states and 31 cemeteries in 11 states, focusing on delivering premier experiences through innovation and elevated service [4] Partnership Details - The collaboration with Express Funeral Funding will allow Carriage Services to refine its product portfolio and reach new markets, integrating EFF's insurance assignment funding into its offerings [2][3] - The partnership is expected to create new opportunities for both companies and enhance the value provided to families [4][6] Leadership Statements - Carlos Quezada, CEO of Carriage Services, expressed excitement about the partnership, highlighting its potential to broaden product offerings and improve service quality [3] - Andy Buckman, President of Express Funeral Funding, emphasized the partnership's potential to deliver greater value to families [4]

Core Viewpoint - Carriage Services (CSV) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors [4]. - For the fiscal year ending December 2025, Carriage Services is expected to earn $3.20 per share, reflecting a 20.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Carriage Services has risen by 13.2% [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Carriage Services to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for near-term price increases [10].

Economic Overview - Concerns about a slowing economy have intensified, with the Federal Reserve unlikely to implement rate cuts soon due to persistent inflation [1][8] - Consumer confidence has dropped significantly, with the Conference Board's consumer survey index falling to 98.3 in February, below the expected 102.3 [7] Inflation Data - The consumer price index (CPI) rose by 0.5% in January, following a 0.4% increase in December, marking the largest jump since August 2023 [5] - Year-over-year, CPI increased by 3% in January, up from 2.9% in December, the highest annual gain since April 2024 [6] Consumer Staples Investment - Investing in consumer staples stocks is recommended as they are considered defensive during economic uncertainty [2] - Suggested stocks include Carriage Services, Inc. (CSV), Lancaster Colony Corporation (LANC), Tyson Foods (TSN), and Molson Coors Beverage Company (TAP), all carrying a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [2] Company Profiles - **Carriage Services, Inc. (CSV)**: Expected earnings growth rate of 7.2% for the current year, Zacks Rank 2, beta of 0.91, and a dividend yield of 1.12% [12][13] - **Lancaster Colony Corporation (LANC)**: Expected earnings growth rate of 6.1% for the current year, Zacks Rank 2, beta of 0.31, and a dividend yield of 1.99% [14][15] - **Tyson Foods (TSN)**: Expected earnings growth rate of 22.6% for the current year, Zacks Rank 2, beta of 0.72, and a dividend yield of 3.26% [16][17] - **Molson Coors Beverage Company (TAP)**: Expected earnings growth rate of 6.5% for the current year, Zacks Rank 1, beta of 0.81, and a dividend yield of 3.07% [18][19] Investment Strategy - The recommended investment strategy focuses on low-beta stocks with high dividend yields and favorable Zacks Ranks [3]

Financial Market Conditions - The fair market value of trust funds may decline below estimated costs, potentially leading to charges against earnings for expected losses[91]. - Earnings from trust funds are influenced by financial market conditions, with declines potentially affecting current revenue and future cash flows[92]. - The financial condition of third-party insurance companies funding preneed contracts could impact the company's ability to collect proceeds, affecting financial condition and cash flows[95]. - Changes in tax laws, such as the Inflation Reduction Act, could have material effects on the company's financial condition, though current assessments indicate minimal impact[98]. - The company faces risks from litigation and claims that could result in significant monetary damages, impacting financial position and cash flows[99]. - Declines in death rates and changing consumer preferences could lead to decreased revenue, with unpredictable fluctuations in death rates affecting operations[100]. - The increasing trend of cremations may result in revenue decline due to lower average revenue per cremation compared to traditional burials[101]. - Compliance with extensive regulations in the funeral and cemetery industry may increase costs and decrease cash flows, impacting overall financial condition[105]. Debt and Financial Obligations - As of December 31, 2024, the company had a total debt of $542.5 million, which includes $400.0 million in Senior Notes and $137.0 million in outstanding borrowings under its Credit Facility[113]. - The company has $110.8 million available under its Credit Facility after accounting for $2.2 million in outstanding letters of credit[113]. - The company may incur additional indebtedness in the future, which could exacerbate existing leverage risks[117]. - The company has outstanding borrowings under the Credit Facility of $137.0 million as of December 31, 2024[265]. - A 100 basis points change in the borrowing rate would result in a change in income before taxes of $1.4 million[265]. - The Senior Notes bear interest at a fixed annual rate of 4.25% with a carrying value of $396.6 million and a fair value of $364.4 million as of December 31, 2024[266][267]. - A 0.25% change in interest rates causes an approximate 0.37% change in the value of fixed income securities[264]. - The company has not entered into interest rate hedging arrangements in the past but continually evaluates their cost and potential benefits[265]. - The company is primarily exposed to interest rate risk and changes in the values of securities associated with preneed and perpetual care trusts[261]. Operational Risks - The company is exposed to significant risks from economic conditions, including potential adverse effects from inflation, which could increase costs and reduce consumer discretionary spending[119][120]. - The company operates over 40% of its businesses in California, Texas, and Florida, areas prone to natural disasters, which could disrupt operations and increase costs[128]. - The company has implemented enhanced cybersecurity measures following a ransomware attack in January 2021, but remains vulnerable to future cyber threats[129][130]. - The company may face challenges in accessing funding sources due to adverse developments in the financial services industry, which could impact liquidity[122][123]. - The company has incurred costs to comply with increasing data privacy regulations, which may rise significantly due to evolving requirements[131][132]. Internal Controls and Risk Management - The effectiveness of internal control over financial reporting is crucial for accurate financial reporting and investor confidence[134]. - The company may require significant capital investments to remediate any failures in its information technology systems[133]. - The company does not enter into derivative or other financial instruments for speculative or trading purposes[262]. - Management is actively involved in monitoring exposure to market risk and developing appropriate risk management techniques[261].