Three months ago the 1st Quarter report of 2019 for funeral home and cemetery operator Carriage Services caused concern for many of their stockholders. In that quarter, same store revenue for funerals and profitability took a backward trend as did the number of atneed and preneed services conducted or contracted.
That report led management to acknowledge that not all was perfect and they were going to be making some changes in the operational end of their business.
Carriage Services reported financial numbers for the 2nd Quarter of 2019 last week and, as management had indicated, things looked a lot better. You can access that report here.
Not only was same store revenue on the funeral side of the business up about 3.6% – funeral revenue as a whole, which includes acquisition revenue – was up 8.6%. Funeral service revenue for the quarter increased to $50.3 million over the first three months of 2018’s revenue of $46.3 million. After trailing last quarter, it pushed total funeral operating revenue to $104.2 million as compared to 2018”s first half revenue of $102.6 million — an increase of 1.6%.
- Cemetery operating revenue jumped 11.3% for 2Q19 over 2Q18 and is up 6.0% for the year.
- As a whole, Carriage Services reported total revenues for 2Q19 of$67.7 million as compared to $63.8 million for 2Q18 which brings the first half total revenues almost equal to last years as they sit at $136.8 million for the first half of 2019 as compared to $137.2 million for the first half of 2018.
- Carriage Services also worked at improving overhead expenses during the 2nd quarter of 2019. According to the report they reduced Regional Fixed overhead by 3.3% and reduced Corporate Fixed overhead by 5.1% during the quarter.
- Finally, Pre-Tax Income for 2Q 2019 was reported as $7.0 million as compared a Pre-tax income for 2Q18 of $3.7 million and 6 month income for 2019 was reported as $16.2 million as compared to 2018’s $15.9 million. . .an increase of 1.4%
Funeral Director Daily take: There is no doubt that this report is more reassuring to Carriage Services stockholders than the report they received in May 2019 on the company’s 1st Quarter. From our point of view, it is good to see a company roll up their sleeves and attack issues that are keeping them from better productivity and profits. . . .and there are always those issues that need to be addressed.
We also believe, however, that this trend of operating efficiencies need to be continuously monitored because it is our assumption, especially because of Carriage Services traditional funeral home models, that the level of cremations and direct cremations at Carriage Services locations will continue to increase in percentage and that will put a strain on the upper line revenues. As those income related services are affected, costs will become increasingly something that has to be controlled.