Death care public company and industry leader Service Corporation International announced 3rd Quarter results yesterday and with the announcement came earnings news of $0.37 per share for the quarter compared to $0.29 per share in the same quarter one year ago.  Total revenues, which include acquisitions, are up for the quarter to over $778 million as compared to last year’s quarterly revenues of $731 million — an increase of 6.5%.  For the 2018 year’s first nine months total revenues are at $2.369 billion – an increase of 3.8% over the same period of one year ago.

You can get a copy of their Earnings release here.

Funeral Director Daily take:  Looking at comparable details (what SCI calls same store sales) for the period does show a little bit different tale.  I’ve analyzed “same store” sales and on the funeral side those numbers show a decrease in services performed by less than 1% and also  a decrease in funeral revenue by about the same margin.  An interesting note that I always like to look at is the revenue per case and it appears that SCI was able to increase revenue per case by $23 per case even though their cremation rate nudged to 55.0% from 53.4%.

An interesting fact that I noticed and will relate to you is what I deem the importance of Preneed to the overall operation of SCI.  As I’ve mentioned many times I always like to delve into the minutia of these reports and try to figure out how the information could help me in operating my own funeral home.

From the information that SCI has provided on “same store” sales it appears to me that $136 million of their $363 million of Funeral Revenue comes from what they call “Matured Preneed Revenue”.  That is a little over 37% of funeral revenue coming from preneed accounts.  They also break out comparable services performed by “At-Need” and “Preneed”.  For this quarter 22,147 of the 61,226 services performed were preneed services — that is 36%.

Finally, they break out Comparable Sales Averages by “At-Need” and Preneed”.  While their total Revenue per Service for the funeral side of the business is $5,934, it is broken out as $5,809 for “At-Need” and $6,154 for “Preneed” – which is a $345 or 6% increase in service revenue depending on whether it was at-need or pre-need.  That number alone shows the value of pre-funding funerals to the establishment.  What makes it even more important is that the average revenue per service for “At-Need” has decreased in the last year while that same statistic has increased for preneed.

So, in essence, the SCI report shows us that a little over 1/3 of their services are preneed funded and those services show a 6% higher revenue per service sale.  Now that you know that from SCI, you should strive for that number at your funeral home.

Finally, while we mentioned that SCI’s same store funeral revenue is pretty flat for the period they do report an $8 million comparable gain for the quarter in what they describe as “preneed contracts sold through our non-funeral home sales channel and an increase in other revenue due to higher agency revenue resulting from a 13.6% increase in preneed funeral sales production.”  Those numbers indicate to me how much SCI values their preneed program and what it can do for the company moving forward.  All funeral home owners should look at that and ask themselves if they are committed to preneed as a way to build their business.

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