Carriage Services’ Earnings Call Highlights Growth and Challenges

Carriage Services ((CSV)) has held its Q3 earnings call. Read on for the main highlights of the call.

Carriage Services’ recent earnings call highlighted a strong financial performance, marked by significant revenue and EBITDA growth. The company showcased strategic acquisitions and debt reduction efforts, positioning itself well for future growth. However, challenges such as a decline in funeral operating revenue, negative impacts from divestitures, and increased capital expenditures were also discussed.

Revenue Growth

The company reported a total operating revenue of $101.3 million for the quarter, reflecting a 5.2% increase over the same period last year. This growth was primarily driven by a remarkable 21.4% year-over-year increase in preneed cemetery sales.

Insurance-Funded Preneed Sales

Carriage Services achieved significant progress in insurance-funded prearranged funeral sales, with September setting an all-time high and surpassing the $7 million mark, showcasing the company’s strong performance in this segment.

Cemetery Segment Performance

The cemetery segment demonstrated robust growth, with operating revenue reaching $35.6 million, an increase of $4 million or 12.6% year-over-year, highlighting the strength of this business area.

Adjusted Consolidated EBITDA Growth

Adjusted consolidated EBITDA rose to $33 million, up $2.2 million or 7.3% compared to last year. The company also achieved an adjusted EBITDA margin expansion of 160 basis points to 32.1%.

Acquisition Activity

Carriage Services continued its strategic growth through acquisitions, welcoming new entities like Faith Chapel Funeral Homes and Crematory and Osceola Memory Gardens Cemetery Funeral Homes and Crematory, among others.

Debt Reduction

The company’s leverage ratio improved to 4.1x this quarter, down from 4.2x last quarter, with debt reduced by approximately $5.1 million compared to last year’s third quarter, reflecting effective financial management.

Funeral Operating Revenue Decline

Despite overall growth, funeral operating revenue declined by $753,000 or 1.3%, primarily due to a 2.1% reduction in funeral volume during the summer months of July and August.

GAAP EPS Decline

The GAAP EPS for the third quarter was $0.41, down from $0.63 in the third quarter of 2024, negatively impacted by a loss on divestitures and impairment of long-lived assets.

Divestitures Impact

The company’s divestiture strategy led to a loss on divestitures and impairment of long-lived assets, which affected its GAAP performance.

Increased Capital Expenditures

Capital expenditures for the quarter totaled $6.7 million, compared to $4.6 million in the same period last year, indicating increased investment in the company’s infrastructure.

Forward-Looking Guidance

Carriage Services reaffirmed its guidance for the fiscal year, projecting revenues between $413 million and $417 million and an adjusted consolidated EBITDA between $130 million and $132 million. The company remains optimistic about its growth trajectory, despite the challenges faced in certain segments.

In summary, Carriage Services’ earnings call reflected a positive sentiment, with strong financial performance and strategic growth initiatives. While challenges such as declines in funeral operating revenue and impacts from divestitures were noted, the company’s forward-looking guidance remains optimistic, projecting continued growth and stability.