Carriage Services CEO Carlos Quezada on 2023 Results: “. . instills confidence and excitement”

American funeral home and cemetery operator Carriage Services recently shared the results of their 4th Quarter and Year-End financials with the public.  In doing so, and in spite of a continuing COVID “pull forward” impact resulting in modest declines in funeral contract volume experienced during the year, the company reported total 2023 revenues 3.3% over the prior year.  Revenues for the year of 2023 came in at a total of $ 382.5 million as compared to 2022 revenues of $ 370.2 million.

The revenues for the 4th Quarter of 2023, which may be an indicator of an abatement of the “pull forward” pandemic death rate effect, came in at $ 98.8 million compared to 2022’s 4Q revenue of $ 93.9 million — an increase of 5.2%.

According to the earnings press release from Carriage Service, which you can access here, these results of increased revenue came even though the company had a “modest decline in funeral contract volumes” believed to be caused by the pandemic death “pull-forward’ effect.

In prepared remarks in the press release by Carriage Services President and CEO Carlos Quezada it was stated, “This success in growing our top line stems from our targeted efforts to better leverage our pricing power, which drove improved average revenue per contract. . . . This momentum, marking four out of five consecutive quarters of solid performance, instills confidence and excitement in our core initiatives as we advance into 2024 and focus on fulfilling our new purpose statement, which is ‘Creating premier experiences through innovation, empowered partnership, and elevated service.’”

The approximately $12 million in revenue increases can be accounted for in this manner according to the press release:

• A 9.4% increase in the average price of preneed interment rights sold
• An 8.6% increase in the number of preneed interment rights (property) sold
• A 0.9% increase in average revenue per funeral contract
• A 2.4% decrease in the number of funeral contract volume

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Even though Net Income for 2023 dropped about $8 million for the 2023 calendar year for Carriage Services, there is a lot to like about this report.  Profits generally declined because the company’s interest payments went to about $36 million per year from about $25 million per year  —  Which in my opinion has a lot to do with interest rates, in general, rising over the past couple of years.

When you look back to 2019, the last year of complete results prior to the pandemic, total revenues for the company have jumped almost 40% — from $274.1 million in 2019 to $382.5 million in 2023.  And, Adjusted Net Income has jumped to over $34 million from about $22.5 million over the same time period. . . . even while the company is paying almost double in interest costs.  If interest rates drop as expected in the near future, the pandemic “pull-forward” effect continues to be reduced, and the company can continually control their operating costs, even better times may be ahead for Carriage Services.

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