Carriage Services 1Q 2021 Revenues rise almost 25%

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Carriage Services was the first of our public death care companies to report on their 1st quarter of 2021 (January thru March 2021 numbers) when they did so last week.  Even knowing that January 2021 had a high number of additional mortality in the United States because of the number of Covid-19 deaths, you have to look at the Carriage Services financials and be somewhat impressed.

When the final mortality numbers come out as to additional Covid-19 related deaths that number would most likely be in the 10-13% additional on a nationwide basis.  When you look at the Carriage Services “Same store Contracts” for 1Q21 you will see that they increased by over 21%. . . . so, even with potential additional deaths, they probably grew by 10% in raw numbers over and above the potential Covid-19 increase.  You can see the Carriage Services 1Q 2021 report here.

The “Same  Store Revenue” also increased 21% from $46.6 million in 2020 to $56.6 million in 2021.  “Same store Cemetery Revenue” also increased. . . at a pace of 34%.  Funeral Director Daily likes to look at “Same Store” comparisons on financial sheets because those numbers, in a comparison mode, are not skewed by new acquisitions.

Another interesting item we noted in looking at the financial reports of the “Same Stores” was that “Revenues per contract”, “Revenues per Burial Contract”, and “Revenues per Cremation Contract” all have rebounded from pandemic lows on a “Revenue Per Case” number to within 1% of where those numbers were in the 1st Quarter of 2020 when the pandemic was just starting and social distancing rules were not yet being enforced reducing the opportunity for full services.

Carriage Services shows these “Revenue Per Case” numbers on Page 2 of their report in Quarterly numbers and it appears that 2020’s 2nd Quarter (April, May and June) was when they hit their lowest point.  It appears that in 2Q 2020 there Revenue per Case dipped about 5-6% at its lowest quarterly point during the 2020 point of the pandemic.

One number that did jump out at us in the 1Q21 report over the 1Q20 report was the increase of over $5 million in Total Variable Overhead.  That item was explained in the report via this sentence, “. . . . began to add increasingly high amounts of corporate and field incentive compensation to Variable Overhead starting in June. Our Variable Overhead increased from $1.6 million in first quarter 2020 to $3.7 million in the second, $4.1 million in the third and then $6.7 million in the fourth as December exploded with broadly higher Revenue and EBITDA Margin performance across our funeral and cemetery portfolios.” 

That Variable Overhead increase caused Total Overhead Expenses to grow to 14% of Revenue as compared to 10% in 2020.  However, as mentioned above, with the increased revenues brought in, the Consolidated EBITDA Margin was raised to 33% of Revenue compared to 28.7% in 2020.

It appears that the increase in sales resulted in a 1Q21 Pre-Tax Income of over $18 million for Carriage Services as compared to a $6.3 million loss in 1Q20.

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