Security National shows the way

November 20, 2023/Finance/

In business it is many times believed that the smaller you are, the more nimble you can be. And, if you live on a lake or an ocean you probably have heard the phrase that you “can turn around a jetski faster than an aircraft carrier”.

Both of those thoughts came to my mind when I looked over the results of the Memorial Segment of Security National Financial Corporation for the 3rd Quarter of 2023. You can see the results in a press release here.

Just last week we authored this article which related in it how the three big public companies in funeral services — Service Corporation International, Carriage Services, and Park Lawn Corporation, all increased comparable revenue for the 3rd Quarter of 2023, but struggled to turn that increased revenue into greater increased profits.

And, we surmised that the major reasons for that were rising interest rates and rising inflationary costs that had a lot to do with that profitability issue.

The Memorial Segment of Security National Financial Corporation (SNFC) is a much smaller grouping of funeral homes and cemeteries than either of those three aforementioned companies. Maybe they happen to be the jetski in the water compared to SCI’s aircraft carrier operation. . . . .

Regardless of how it was done, and we don’t get much insight from the 3Q2023 press release, Security National has been able to turn small gains in their 3Q and 9-month 2023 revenues into much bigger profits in comparison to the same quarter in 2022.

Tom Anderson
Funeral Director Daily

Maybe it is that relatively small scale that has allowed them to “turn-on-a-dime” and redirect their focus in the wake of higher interest and higher costs. . . . Maybe there is more to it. . . quite possibly the main region that they operate — Utah and Northern California — more than likely does not hold as many direct cremation services as other parts of the country. Whatever “it” is or was, SNFC was able to take a 10.8% revenue increase for 3Q2023 and turn it into a 63.2% earnings increase. . . . and that is excellent and a notice to other smaller operations that they can do well in this inflationary environment if they put their mind – and cost decisions – to it.

For the 3rd Quarter of 2023, the Memorial Segment of SNFC pulled in $7.4 million in revenue as compared to about $6.7 million for the same quarter in 2022. And, for the nine-months to date the company has brought in $23.4 million in revenue compared to $21.4 million for the same quarter in 2022.

As for profits to date, the Memorial Segment of SNFC has earnings of $6.08 million in 2023 as compared to earnings of $4.4 million in 2022. . . .an increase on the year of 38.0%

Not much is said in the company’s press release about the Memorial Segment, but SNFC President Scott M. Quist did make this statement, “Our Memorial Segment, as death counts have stabilized, has been focused on improving operating performance and is now 38% ahead of 2022″.

It should be noted that SNFC also operates a Life Insurance Segment, of which part is in the preneed funeral business. That part of the company also recorded increased revenues and profits year to date. President Quist made this comment about that segment in his remarks, “Our Insurance Segment is having its best Q3 YTD operational results ever on a 9% increase in premium revenue while maintaining stable costs against the current inflationary environment”.

In a nod to “controlling costs” of the entire operation, Quist added these thoughts in his remarks, “I can say that all of our segments have worked diligently to rationalize their costs of operations and have done so with considerable success”.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder in Security National Financial Corporation.

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