About Carriage Services

Carriage Services, Inc. is a leading provider of funeral and cemetery services and merchandise in the United States. As of December 31, 2022, the company operated 171 funeral homes in 26 states and 32 cemeteries in 11 states. Segments The company operates through two segments: Funeral Home Operations, which accounts for approximately 70% of its total revenue, and Cemetery Operations, which accounts for approximately 30% of its total revenue. Funeral home and cemetery businesses provide products and services to families in three principal areas, such as ceremony and tribute, generally in the form of a funeral or memorial service; disposition of remains, either through burial or cremation; and memorialization, generally through monuments, markers or inscriptions. The company’s funeral homes offer a complete range of services to meet a family’s funeral needs, including consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. Most of the company’s funeral homes have a non-denominational chapel on the premises, which permits family visitation and services to take place at one location and thereby reduces transportation costs and inconvenience to the family. The company’s cemeteries provide interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise). The company provides funeral and cemetery services and products on both an atneed (time of death) and preneed (planned prior to death) basis. Business Strategy The company’s business strategy is based on strong, local leadership with entrepreneurial principles that focuses on sustainable long-term market share, revenue, and profitability growth in each local business. Funeral Home and Cemetery Operations The company’s Funeral Home and Cemetery operations are managed by a team of experienced industry and sales professionals with substantial leadership experience. All of the company’s funeral homes offer cremation products and services. The company’s funeral homes and cemeteries are managed by entrepreneurially focused Managing Partners with extensive funeral and cemetery industry experience, often within their local markets. They are responsible for day-to-day operations and for growing the business by hiring, training and developing highly motivated and productive local teams. The company’s businesses are supported by a broader team of High Performance leaders across multiple disciplines in its support center located in Houston, Texas. This promotes more cooperation and synergy between the company’s funeral and cemetery operations and supports the goal of market-share and volume growth in its most significant markets. The company has strong field-level gross profit margins and this performance is a testament to the success of its business strategies. The company has implemented information systems to support local business decisions and to monitor performance of its businesses compared to financial and performance standards. Additionally, the company has innovative technological and digital tools that enhance its ability to serve its client families in a remote environment. To further enhance the services the company provides to its client families, it has begun developing a multi-year strategy with a greater focus on leveraging technology, specifically with customer facing opportunities. Preneed Programs The company markets funeral and cemetery services and products on a preneed basis at the local level. The company operates under a decentralized preneed sales strategy whereby each business location customizes its preneed program to its local needs. The company sold 9,111 preneed funeral contracts, net of cancellations, during the year ended December 31, 2022. As of December 31, 2022, the company had a backlog of 100,861 preneed funeral contracts to be delivered in the future. In addition to preneed funeral contracts, the company offers pre-planned funeral arrangements whereby a customer determines in advance substantially all of the details of a funeral service without any financial commitment or other obligation on the part of the client until the actual time of need. Pre-planned funeral arrangements permit a family to avoid the burden of making deathcare plans at the time of need and enable a funeral home to establish relationships with a client that may eventually lead to an atneed sale. Approximately 50% of the company’s cemetery operating revenue is derived from preneed property sales. The company’s preneed cemetery strategy is to build family heritage in its cemeteries by selling property and interment rights prior to death through full time, highly motivated and entrepreneurial local sales teams. The company’s goal is to build broader and deeper teams of sales leaders and counselors in its larger and more strategically located cemeteries, including the development of standardized sales systems across its portfolio of cemeteries, in order to focus on growth of its preneed property sales. For example, during 2022, the company continued to grow its cemetery sales and marketing team to develop and implement its standardized sales system. Cemetery merchandise and services are often purchased in addition to cemetery property at the time of sale. As of December 31, 2022, the company had a backlog of 66,797 preneed cemetery contracts to be delivered in the future. Trust Funds and Insurance Contracts The company has established a variety of trusts in connection with funeral home and cemetery operations as required under applicable state laws. Such trusts include preneed funeral trusts; preneed cemetery merchandise and service trusts; and cemetery perpetual care trusts. These trusts are typically administered by independent financial institutions that the company selects. Investment management and advisory services are provided either by the company’s wholly-owned registered investment advisory firm (CSV RIA) or by independent financial advisors. As of December 31, 2022, CSV RIA provided these services to approximately 80% of the company’s trust assets, for a fee based on the market value of trust assets. Under state trust laws, it allowed to charge the trust a fee for advising on the investment of the trust assets and these fees are recognized as income in the period in which services are provided. Regulation The company’s funeral home operations are comprehensively regulated by the Federal Trade Commission (FTC) under Section 5 of the Federal Trade Commission Act and a trade regulation rule for the funeral industry promulgated thereunder referred to as the Funeral Rule. The company is subject to the requirements of the federal Occupational Safety and Health Act, as amended (OSHA), and comparable state statutes whose purpose is to protect the health and safety of workers. In addition, the OSHA hazard communication standard, the Emergency Planning and Community Right to Know Act and implementing regulations and similar state statutes and regulations require that it organizes and/or discloses information about hazardous materials used or produced in its operations and that this information be provided to employees, state and local governmental authorities and citizens. History Carriage Services, Inc. was founded in 1991. The company was incorporated in the state of Delaware in 1993.