Most people in the death care profession know that StoneMor, Inc. has, for the last couple of years, been on what they term an “operational turnaround”. The company, based just outside of Philadelphia, is said to be the second largest, next to Service Corporation International (SCI), death care company in North America. The death care market is believed to be about $21 billion in annual revenues and StoneMor is believed to have about 1.5% of that market. It is believed that StoneMor owns and operates 320 cemeteries and 90 funeral homes.
In any regards, the Philadelphia Inquirer just did as nice a story on StoneMor and where it is sitting,business wise, today as I have seen. You can access the article here.
Obviously, for a company that has lost quite a bit of money in each of the last few years, there is quite a bit of anxiety on its prospect going forward. The stock has dropped from over $30 per share some five years ago to less than $1 per share today. Keith Trost, StoneMor’s Vice President of Finance, is quoted in the article, “We’re solvent enough to maintain the properties”.
The article also points out that a New York based hedge fund is now StoneMor’s majority owner. According to the article, Axar Capital “has pumped millions into reviving StoneMor’s prospects”. The article theorizes that the company’s strategy may be to sell off selected cemetery properties.
The article also points out that while StoneMor has its own issues, the funeral profession as a whole is losing revenue due to the social distancing and no-large gathering rules pertaining to services during the COVID-19 era. The authors point out that revenue is being missed from embalmings and burials being deferred. And, cremation is up which cuts down on revenues.
StoneMor’s Trost agreed, “We are beginning to see a down-tick in average funeral spend” he is quoted on saying in the article.
As to how StoneMor is doing, Andrew Axelrod of majority owner Axar Capital commented, “We have been pleased with the progress management is making less than a year into a significant operational turnaround following our June 2019 recapitalizaton. . . . .focusing on industry best practices to gain operating efficiencies, tactical outsourcing and overhead reduction.”
Funeral Director Daily take: Revenue loss to funeral homes and cemeteries from the COVID-19 situation is really starting to crystalize and get to the point where funeral home owners have to understand and compensate for it being real. It’s mentioned in the above article and Park Lawn Interim CEO Brad Green mentioned it on the Park Lawn earnings call on April 1 when he said, “”we’re going into basically week 2. . . Right now we are not seeing a drop in volume at all. And we’re seeing on the average sale around 7% decrease right now.”
Also, in this article from Yahoo Finance concerning Australia and New Zealand’s InvoCare, they cannot specify the revenue decline per funeral but estimate it is less than 10%. They also warned, however, “there could be more impact”.
From my point of view, I see revenue loss of only 10% because of social distancing, an alluring goal, but not a realistic reality. Anecdotally, I’ve heard numbers much higher — as a matter of fact, on one public webinar, one owner/operator said the revenue loss per case was a $3000 drop per case at his funeral home between February and March.
I think funeral home and cemetery owners need to really be on the look out for what is happening out there. In today’s world, things seem to happen at break-neck speed. What people want and how they want it may change. . . . in just the past couple of weeks we have probably moved technology up five years in the funeral industry — between distance arrangements and streaming of services. . . . learning how to charge and profit from what we are doing will come next.
Here’s what one major bank CEO said about where we are as business owners today:
“The only prudent strategy right now is to remain flexible, make no solid plans, and be ready to change your mind at a moment’s notice. This doesn’t mean you can hold no views about the future. But all views must be loosely held.”
Change has historically happened slowly in the funeral profession as mores seem to change generationally. I am somewhat reminded, however, about in 1979 when Iran took Americans hostage at our embassy in Iran. That event started a late night news program. . . originally named “America Held Hostage” and featuring a young newsman named Ted Koppel. The trend of watching late night news continued after the hostages were released and Ted Koppel continued as a household name with the new late night news program, Nightline. Prior to that, late night was always comedy or reruns. i.e the “event” changed our habits.
My point being is that we don’t quite know what the long-term effects of social distance funerals and no-large gathering funerals will trend into. We do, however, have to have our eyes open as to how the trend could change death care as we know it.
More news from the world of Death Care:
- Grieving in our times. Inquire.net. Phillipines
- Grieving safely in a pandemic. Urbana Daily Citizen. (OH)
- Cemetery mix-up: Family says body already in plot reserved for their uncle. WBPF-West Palm Beach. Video and story. (FL)
- Woman accused of embezzling $300,000 from cemetery. Enid News & Eagle. (OK)
- Walterboro funeral home co-owner says business survived storm. ABC News 4. (SC) Video and story.