Service International(US:SCI)2025-10-30 18:00Operations and Locations - As of September 30, 2025, the company operates 1,487 funeral service locations and 499 cemeteries, with a backlog of future revenue amounting to $16.8 billion from preneed sales[98] - The company served approximately 700,000 families in 2025 through its Dignity Memorial® brand, focusing on exceptional service and personalized remembrances[99] - The company aims to invest in strategic acquisitions and new funeral service and cemetery locations to enhance growth and achieve economies of scale[108] Financial Performance - Net cash provided by operating activities increased to $729.9 million for the nine months ended September 30, 2025, compared to $680.8 million for the same period in 2024, reflecting a $49.1 million increase[112] - For the three months ended September 30, 2025, consolidated net income attributable to common stockholders was $117.5 million ($0.83 per diluted share), compared to $117.8 million ($0.81 per diluted share) in the same period of 2024[147] - Consolidated funeral revenue for Q3 2025 was $574.1 million, a 1.4% increase from $566.0 million in Q3 2024[150] - For the nine months ended September 30, 2025, consolidated funeral revenue was $1,804.9 million, a $68.4 million increase from $1,736.5 million in 2024[168] Revenue and Sales - Preneed insurance-funded sales production reached $214.3 million in Q3 2025, up from $164.1 million in Q3 2024, with the number of contracts sold increasing from 28,000 to 41,617[124] - Total sales production for the cemetery segment increased to $457.2 million in the third quarter of 2025, up 9.5% from $418.2 million in 2024[126] - Total recognized preneed revenue grew by $13.1 million, supported by a 4.1% increase in comparable preneed sales production, amounting to $40.4 million[175] Profitability - Consolidated funeral gross profit decreased by $8.3 million, or 7.7%, to $99.6 million in Q3 2025, with comparable gross profit percentage dropping from 19.2% to 17.5%[155] - Consolidated cemetery gross profit increased by $21.1 million, or 14.6%, to $165.9 million in Q3 2025, with comparable gross profit percentage rising from 32.4% to 34.0%[160] - The gross profit percentage remained flat at 32.8%, as revenue increases were offset by higher selling compensation and modest fixed cost growth[176] Cash Flow and Investments - Cash flows from investing activities decreased to $341.4 million in 2025 from $484.6 million in 2024, primarily due to reduced cash spent on business acquisitions and real estate[112] - Interest expense decreased by $3.3 million to $191.2 million, mainly due to lower interest rates on floating rate debt[179] Debt and Leverage - The company’s leverage ratio as of September 30, 2025, was 3.61, well within the maximum allowable ratio of 5.00[106] - Total surety bonds outstanding increased to $504.9 million as of September 30, 2025, compared to $454.4 million at the end of 2024[115] Tax and Shares - The effective tax rate increased to 26.1% for the nine months ended September 30, 2025, compared to 23.1% in 2024, primarily due to changes in tax estimates[180] - The diluted weighted average number of shares outstanding decreased to 143.2 million from 147.0 million, reflecting the impact of share repurchases[182] Market Risks - The company faces various market risks, including potential impacts from economic conditions, regulatory changes, and competition in the funeral and cemetery industry[187]