Carriages Services 2Q 2023: Revenues increase but Interest expense holds back profits




Houston based funeral home and cemetery operator Carriage Services reported their 2nd Quarter 2023 financial report last week one day after Service Corporation International.  What may become a common theme is that the companies have been able to increase revenue quarter over quarter during the past year but those gains run into strong headwinds fueled by expense inflation and interest rate hikes.


Here’s what Carriage Services CEO and President Carlos Quezada said in prepared remarks for his company’s press release which you can access here: We are excited to announce our robust second quarter results, which reflect the successful implementation of our strategic plan. This quarter’s 7.8% growth in total revenue is predominantly attributed to increased preneed cemetery sales, which led to a significant 16.1% growth in our total cemetery operating revenue. This outcome is a direct consequence of our concerted efforts in enhancing our sales teams and leveraging advanced technology, enabling us to cultivate a substantial pipeline of sales opportunities. “


At Funeral Director Daily we noticed that sales success, especially in the cemetery side of the business.  Carriage Services’ financial statements show that the funeral side of the business had a little less success, but still increased their revenue for the quarter 4.6% from $58.1 million in 2Q2022 to $60.8 million in 2Q2023.


What we also noticed however, was the “PreTax Income” dropped 22.7% to $11.7 million for the quarter as compared to $15.1 million of PreTax Income in 2Q2022.  That’s a drop of about $3.4 million which can almost all be accounted for in the company’s growth of “Interest Expense” for the quarter.


Interest Expense for 2Q2023 is listed at $9.3 million as compared to the same item in 2Q2022 where it is listed at $5.98 million. . . a difference of $3.32 million.  At Funeral Director Daily we don’t know if that amount represents interest for additional debt of if it represents higher interest rates (possibly on adjustable rate debt).  Or, it may be a combination of both.


However, it does appear to be the difference in the final numbers of “PreTax” profits for the 2nd Quarters of the respective years.


Funeral Director Daily take:  With the SCI report we saw higher revenues and then compressed margins.  With Carriage Services we are seeing higher revenues but then higher interest payments.


As individual funeral home and cemetery operators who read Funeral Director Daily I think it is just a good reminder that there are a lot of items you need to keep on top of to generate maximum profits.  And, that takes time, effort, study, and an understanding of all of financial barometers to hit profitability on all cylinders.


Over my years in business I’ve found great funeral directors who served families with incredible skill and passion and yet didn’t reap the rewards of ownership simply because they didn’t understand all the financial underpinnings that were necessary to do so.


Make sure that you have knowledge and data to help you understand those financial underpinnings.  And, if you don’t want to learn it all and just keep serving families, make sure you get a financial expert, such as Johnson Consulting Group, in your corner who can help you with it.  That could make a huge difference in your profitability and eventual exit and retirement.


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  1. Bill on August 8, 2023 at 10:50 am

    I did want to add.
    before the interest/debt…
    CSV is a very well-run company with great margins.

    However, if you marry the supermodel here… you’re going to have to accept that the mother-in-law is moving in with you.
    Hmmm, what to do, what to do? 😎

    Brad has to make an interesting decision here and that’s why I think it’s taking so long.
    *Of note, I think I saw that PLC was bringing in PE on the deal.
    (That’s interesting, so the PE firm will own 20-30% of the CSV equity? and PLC pays them back at a profit later? Hmm, that could work or not.)

    No pressure but, this will likely be the most important acquisition Brad makes or doesn’t make.

    I hope it works out well for all parties.

  2. Matt on August 8, 2023 at 8:11 am

    Well said, Bill

  3. Bill on August 8, 2023 at 5:06 am

    7% interest rates will do that for you.
    And they are still buying homes? Madness.
    Payne may have grown it from nothing but, his bad and silly decisions the past few years have almost destroyed it.

    As much as it would be a coup for PLC mgmt. to get CSV…it may be smart to give this a pass.
    The debt isn’t just bad, it’s a monster that could weigh down PLC for years.
    I’d think it’s best PLC just spends that money on smaller chains.
    (Newcomer, NorthStar or Rollings if they could pull that off. Or maybe try and buy a batch from the PE that bought StoneMor…they are likely overextended too.)

    If PLC is smart and if they can pull it off…I’d try and BUY 20-25% of CSVs homes. A mix of good locations and new areas. Pay near the high end and this could maybe help CSV.

    I think this may be the reason for the delay. PLC would love to get all those locations but, not if hurts PLC long term. There are still many small to mid-size firms. If they take on all of CSV…they won’t be able to buy another business for many years.
    Unfortunately, the CSV locations in CA, FL, and the northeast may be too much to pass up for PLC mgmt.

    Payne and Carlos have too much pride (from what I can hear in their voices) to sell at $34. They aren’t getting any more.

    Let’s see what happens…should be sorted soon.

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