Funeral home and cemetery consolidator Carriage Services reported on the financial results of their 3rd Quarter for 2021 and in doing so reported record 3rd Quarter revenue for a quarter of $95.0 million.  That is 12.6% higher than the $84.3 million of revenue recorded in the 3rd Quarter of 2020.

Here’s what is said in the press release from Carriage Services that you can read here, “All five of our field reporting segments executed at an extremely high level during the quarter with revenue and margin growth accelerating with strong momentum throughout each month to a spectacularly strong September, indicating a likely strong finish to the year in the fourth quarter.”

Due to the performance of the 3rd Quarter of 2021 Carriage Service also announced this in their press release, “Based on the continuing high organic growth rate of all of our performance valuation metrics . . . .  we are raising our opinion of Carriage’s Intrinsic Value Per Share by $10 per share to a Roughly Right Range of $65 to $75 per share.” 

Here is some data that from Carriage Service’s financial results that we noticed at Funeral Director Daily that you may be able to compare to your own funeral home for comparison’s sake:

• Same store contracts were up 12.9% for 3Q 2021 (10,664) as compared to 3Q2020 (9,442).  These were both in covid-years so there is some comparative value as to market share growth evident.

• Overall Average Revenue per contract has consistently grown for the past five quarters with 3Q 2021 showing $5,205/service as compared to 3Q 2020 of $5,069 per service.  That is a growth of 2.7% over a one year period.

• Average Revenue per Cremation case shows the same metric growth with 3Q 2021 showing $3,443 in revenue per case as compared to 3Q 2020 cremation revenue per case of $3,283.  That is a growth rate of 4.8% over a one year period.

• When it comes to case mix, over the past year, Same Store numbers indicate that the company’s “Burial Rate” has dropped over 2% — from 35.8% in 3Q20 to 33.7% in 3Q21.

• For the nine months ended with this quarter, overall company revenue is $279.9 million as compared to $239.3 million for the first nine months of 2020 — that is an increase of 16.9%.

• We also noticed that the company’s interest expense has dropped by almost $5 million.  This is more than likely a result of Carriage Service’s bond refinancing done last May.

• The company also announced that they will be increasing the dividend paid by 5 cents per year bringing it to a total of 45 cents annually at this time.

• Corporate overhead expenses rose by almost $6 million in the year  between the results of 3Q 2021 and 3Q 2020

Finally, here are a couple of statements, indicating Carriage Services’ opinion on these matters taken from their press release:

On their positive Funeral Home Segment Results:  “While we experienced a large increase in funeral volumes in the third quarter, only about 60% of the variance was attributable to deaths from the Delta COVID-19 variant, as our record performance in the third quarter of 2021 was primarily a consequence of our agility and adaptability to the continued changing environment and consumer preferences in our industry. These new industry dynamics have challenged funeral homes across the nation that were not able to adapt and offer new and innovative ways to serve families. Consequently, many independent businesses as well as some consolidators have lost market share since the pandemic began to competitors like Carriage that have adapted with creative solutions that have led to broadly higher funeral volumes (Same Store Contracts up 12.9%) in the third quarter this year versus last.”

On the Acquisition Environment:  During the third quarter, we began to process and qualify a much higher level of acquisition activity, some of which we expect to meet the highly selective Strategic Criteria of our Strategic Acquisition Model  . . . . . We expect the pace of growth by acquisition to pick up in 2022 and beyond compared to 2020 and 2021 when the COVID Pandemic challenged many independent owners not part of a company like Carriage with all of its best in class support services. The COVID Pandemic challenges together with the potential for a large tax increase in capital gains taxes have produced two compelling motivations for independent business owners to consider a succession plan solution sooner rather than later.”

Related—Carriage Services:  Q3 Earnings Snapshot.  The State (TX)

More news from the world of Death Care:

• Metairie Cemetery, with its elaborate tombs is the resting place of New Orleans’ rich and famous.  The Times-Picayune (LA)
• WWII Marine is laid to rest at Arlington National Cemetery almost 78 years after his remains went missing.  CNN

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