Carriage Services reports 2021 Year End, CEO Payne states “Succession Plan Format”

I think it is fair to say that Melvin Payne, CEO and founder of Carriage Services is an unusual leader — but, it is also probably fair to say that Payne’s style of leadership has been effective since the inception of Carriage Services in 1991.

In last week’s published 2021 4th Quarter and Year End report to Shareholders Payne makes this comment, “After co-founding Carriage at 48 years young on June 1, 1991, the company has finally evolved after more than thirty years into a Being The BestMission/Vision Company in our industry. Yet only now do I believe that as an equity investment “The Best Is Yet To Come.”  (Payne’s points of emphasis, not Funeral Director Daily’s)

Payne’s remarks are truly subjective in nature and many in our profession might argue with him, but over the years the former financial profession trained CEO has backed up his statements by continuously growing his company.

While we will report some of the financial data from the shareholder’s report, one of the most interesting points of interest to me is that the 78-year old Payne has finally mentioned a succession plan for the company.  Here’s what he says in the report about that, “The greatest strategic achievement of this past year was that I formally established on June 2, 2021 a succession plan format for the future Executive Leaders of Carriage when I am no longer here, although I have no plans or health reasons to not be here serving as Chairman and CEO over the next five to ten years of optimum value creation. On June 2, 2021, . . .  I promoted Carlos Quezada to Executive Vice President and Chief Operating Officer, Steve Metzger to Executive Vice President and Chief Administrative Officer, and Ben Brink to Executive Vice President and Principal Financial Officer in addition to their other responsibilities and roles, and to membership in our new Strategic Vision and Principles Group (SVPG) chaired by me.”

There is a lot to digest in Carriage Services’ 2021 4Q and Year-End Report and we will be reporting on that and the transcript of the Earnings Call in subsequent editions of Funeral Director Daily.  Here is a copy of the report.

Here are some of the data highlights we will note of Carriage Services for 2021:

  • Annual Revenue increased to $375.9 million, an increase of 14.1% over in FY2020’s Revenue of $329.4 million
  • Earnings per Share increased 62%. . . from $1.86 per share in 2020 to $3.02 per share in 2021
  • For the 4th Quarter of 2021 Revenue per Contract increased from $5,226 in 2020 to $5,346 in 4Q 2021 – an increase of 2.3%
  • For the 4th Quarter of 2021 the Cremation Rate of disposition increased to 56.5% in 2021 as compared to 55.6% in 4Q 2020.

On Acquisitions, here is what Executive VP and Chief Adminstrative Officer, Steven Metzger said in the report:

We continue to be encouraged by the number of acquisition opportunities that have been presented by brokers or, more frequently and preferably, by owners themselves based on longstanding relationships. We remain in advanced discussions with a number of top quality business owners and we are also in the early stages of learning more about several other businesses. While we do not currently have any transactions to announce, we remain excited by the level of succession planning activity and about the prospect of growth by acquisition in 2022 beginning no later than the third quarter, if not before.

While we are focused on our growth through acquisition outlook, our approach to acquisitions will remain highly selective. We recognize the importance of avoiding doing “stupid stuff” such as the aggressive growth through high multiple acquisitions that defined the 1990’s in our industry. . . .  We are disciplined in our review of a business, the market and demographics, growth prospects, and valuation. We will not grow simply for the sake of getting bigger, but will instead remain focused on identifying those candidates that fit our strategic criteria at a valuation that makes sense for both parties.”

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