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What changed in CARRIAGE SERVICES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CARRIAGE SERVICES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+224 added−283 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in CARRIAGE SERVICES INC's 2025 10-K

224 paragraphs added · 283 removed · 166 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

34 edited+13 added−46 removed41 unchanged
Biggest changeWe sold 10,750 and 10,511 preneed funeral contracts, net of cancellations, during the years ended December 31, 2024 and 2023, respectively. At December 31, 2024, we had a backlog of 102,799 preneed funeral contracts to be delivered in the future.
Biggest changeThis partnership agreement increased our commission income 52.0% in 2025 over the previous year. We are projecting this partnership to help drive year-over-year growth in preneed funeral sales of 20% over the next five years. We sold 11,967 and 10,750 preneed funeral contracts, net of cancellations, during the years ended December 31, 2025 and 2024, respectively.
Our 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). Preneed Programs Funeral and cemetery arrangements sold prior to death occurring are referred to as preneed contracts.
Our 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). 3 Preneed Programs Funeral and cemetery arrangements sold prior to death occurring are referred to as preneed contracts.
Trust fund income earned, along with the receipt and recognition of any insurance benefits, are not reflected in our revenue until the service is performed or the merchandise is delivered. Trust fund holdings and deferred revenue are reflected on our Consolidated Balance Sheets, while our insurance funded contracts are not reflected on our Consolidated Balance Sheets.
Trust fund income earned, along with the receipt and recognition of any insurance benefits, are not reflected in our revenue until the service is 4 performed or the merchandise is delivered. Trust fund holdings and deferred revenue are reflected on our Consolidated Balance Sheets, while our insurance funded contracts are not reflected on our Consolidated Balance Sheets.
The incentive payment is subject to partial claw-back if certain preneed funeral sales volumes are not met within the ten-year term of the agreement. As such, we recognize the incentive payment in proportion to our achieved preneed funeral sales volume per the agreement at each reporting period. We have recognized $0.4 million of this incentive payment to-date.
The incentive payment is subject to partial claw-back if certain preneed funeral sales volumes are not met within the ten-year term of the agreement. As such, we recognize the incentive payment in proportion to our achieved preneed funeral sales volume per the agreement at each reporting period. We have recognized $0.8 million of this incentive payment to-date.
Trust Funds and Insurance Contracts We have established a variety of trusts in connection with funeral home and cemetery operations as required under applicable state laws. Such trusts include (i) preneed funeral trusts; (ii) preneed cemetery merchandise and service trusts; and (iii) cemetery perpetual care trusts. These trusts are typically administered by independent financial institutions that we select.
Trust and Insurance Funded Contracts We have established a variety of trusts in connection with funeral home and cemetery operations as required under applicable state laws. Such trusts include (i) preneed funeral trusts; (ii) preneed cemetery merchandise and service trusts; and (iii) cemetery perpetual care trusts. These trusts are typically administered by independent financial institutions that we select.
Although the FTC’s public workshop was completed, no further announcements related to the notice of proposed rulemaking on potential 8 amendments to the Funeral Rule have been announced by the FTC. We cannot predict what changes, if any, may be made to the Funeral Rule or the impact of any such changes on our business. State Trust Laws.
Although the FTC’s public workshop was completed, no further announcements related to the notice of proposed rulemaking on potential amendments to the Funeral Rule have been announced by the FTC. We cannot predict what changes, if any, may be made to the Funeral Rule or the impact of any such changes on our business. 6 State Trust Laws.
Investment management and advisory services are provided either by our wholly owned registered investment advisory firm (“CSV RIA”) or by independent financial advisors. As of December 31, 2024, CSV RIA provided these services to approximately 80% of our trust assets, for a fee based on the market value of trust assets.
Investment management and advisory services are provided either by our wholly owned registered investment advisory firm (“CSV RIA”) or by independent financial advisors. As of December 31, 2025, CSV RIA provided these services to approximately 80% of our trust assets, for a fee based on the market value of trust assets.
Funeral Home and Cemetery Operations Funeral home and cemetery businesses provide products and services to families in three principal areas: (i) ceremony and tribute, generally in the form of a funeral or memorial service; (ii) disposition of remains, either through burial or cremation; and (iii) memorialization, generally through monuments, markers or inscriptions.
Funeral Home and Cemetery Operations Funeral home and cemetery businesses provide products and services to families in three principal areas: (i) ceremony and tribute, generally in the form of a funeral or memorial service; (ii) care of remains, either through burial or cremation; and (iii) memorialization, generally through monuments, markers, or inscriptions.
Approximately 15% of our funeral services performed are funded through preneed contracts, which are usually secured by placing the funds collected in trust for the benefit of the customer or by the purchase of a life insurance policy, the proceeds of which will pay for such services at the time of need.
Approximately 16% of our funeral services performed are funded through preneed contracts, which are usually secured by placing the funds collected in trust for the benefit of the customer or by the purchase of a life insurance policy, the proceeds of which will pay for such services at the time of need.
Approximately 63% of our cemetery operating revenue is derived from preneed property sales. Our preneed cemetery strategy is to build family heritage in our cemeteries by selling property and interment rights prior to death through full time, highly motivated and entrepreneurial local sales teams.
Approximately 64% of our cemetery operating revenue is derived from preneed property sales. Our preneed cemetery strategy is to build family heritage in our cemeteries by selling property and interment rights prior to death through full time, highly motivated, and entrepreneurial local sales teams.
ITEM 1. BUSINESS. GENERAL Carriage Services, Inc. (“Carriage,” the “Company,” “we,” “us,” or “our”) was incorporated in the State of Delaware in December 1993 and is a leading provider of funeral and cemetery services and merchandise in the United States.
ITEM 1. BUSINESS. GENERAL Carriage Services, Inc. (“Carriage,” the “Company,” “we,” “us,” or “our”) was incorporated in the State of Delaware in December 1993 and is a leading provider of funeral and cemetery services and merchandise in the United States (“U.S.”).
Shifting preferences will likely continue to lead to a considerable rise in cremations; as such, we are focused on educating and providing our cremation customers with additional services and products that are available. All of our funeral homes offer cremation products and services.
Shifting preferences will likely lead to a continued rise in cremations; as such, we are focused on educating and providing our cremation customers with additional services and products that are available. All of our funeral homes offer cremation products and services.
None of our employees are represented by unions. 9 AVAILABLE INFORMATION We file annual, quarterly and other reports, and any amendments to those reports, and information with the United States Securities and Exchange Commission (“SEC”).
None of our employees are represented by unions. 7 AVAILABLE INFORMATION We file annual, quarterly and other reports, and any amendments to those reports, and information with the U.S Securities and Exchange Commission (“SEC”).
We compete with other publicly held and independent operators of funeral and cemetery companies. We believe we are a market leader in most of our markets. We provide funeral and cemetery services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis.
We compete with other publicly held and independent operators of funeral and cemetery companies. We believe we are a market leader in most of our markets. We provide funeral and cemetery services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis. COMPANY DEVELOPMENTS Leadership Changes On January 16, 2026, Carriage Services, Inc.
As of December 31, 2024, we and our subsidiaries employed 2,420 employees, of whom 1,200 were full-time and 1,220 were part-time. All of our funeral directors and embalmers possess licenses required by applicable regulatory agencies.
As of December 31, 2025, we and our subsidiaries employed 2,321 employees, of whom 1,248 were full-time and 1,073 were part-time. All of our funeral directors and embalmers possess licenses required by applicable regulatory agencies.
We operate in two business segments: Funeral Home Operations, which currently accounts for approximately 65% of our total revenue, and Cemetery Operations, which currently accounts for approximately 35% of our total revenue. At December 31, 2024, we operated 162 funeral homes in 26 states and 31 cemeteries in 11 states.
We operate in two business segments: Funeral Home Operations, which currently accounts for approximately 65% of our total revenue, and Cemetery Operations, which currently accounts for approximately 35% of our total revenue. At December 31, 2025, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states.
Our goal is to build broader and deeper teams of sales leaders and counselors in our larger and more strategically located cemeteries, including the development of standardized sales systems across our portfolio of cemeteries, in order to focus on growth of our preneed property sales.
Our goal is to build broader and deeper teams of sales leaders and counselors in our larger and more strategically located cemeteries, including the development of standardized sales systems across our portfolio of cemeteries, to focus on growth of our preneed property sales. Cemetery merchandise and services are often purchased in addition to cemetery property at the time of sale.
Copies of the Code of Business Conduct and Ethics and the Corporate Governance Guidelines are also posted on our website under “Investors - Corporate Governance – Governance Documents.” Within the time period required by the SEC and the New York Stock Exchange, we will post on our website any modifications to the charters and any waivers applicable to senior officers as defined in the applicable charters, as required by the Sarbanes-Oxley Act of 2002.
Within the time period required by the SEC and the New York Stock Exchange, we will post on our website any modifications to the charters and any waivers applicable to senior officers as defined in the applicable charters, as required by the Sarbanes-Oxley Act of 2002, as well as any amendments or modifications to our Code of Business Conduct and Ethics.
We also face competition from companies that market products and related merchandise over the internet and non-traditional casket stores in certain markets. These competitors have been successful in capturing a portion of the low-end market and product sales.
There has been increasing competition from providers specializing in specific services, such as cremations, who offer minimal service and low-end pricing. We also face competition from companies that market products and related merchandise over the internet and non-traditional casket stores in certain markets. These competitors have been successful in capturing a portion of the low-end market and product sales.
The largest publicly held operators, in terms of revenue, of both funeral homes and cemeteries with operations in the United States are Service Corporation International (“SCI”), and Carriage. We believe these two companies collectively represent approximately 23% of funeral and cemetery revenue in the United States. Independent businesses, along with other privately-owned consolidators, represent the remaining 77% of industry revenue.
COMPETITION The funeral and cemetery industry has been, and remains, highly competitive. The largest publicly held operators, in terms of revenue, of both funeral homes and cemeteries with operations in the U.S. are Service Corporation International (“SCI”) and Carriage. We believe these two companies collectively represent approximately 23% of funeral and cemetery revenue in the U.S.
Personalization and pre-planning continue to be two important trends in the funeral and cemetery industry, but the national trend toward more cremations may be the most significant. While this trend is expected to continue, other factors are expected to lead to rising industry revenue, including an increase in spending on additional or unique funeral and cremation services.
While this trend is expected to continue, other factors are expected to lead to rising industry revenue, including an increase in spending on additional or unique funeral and cremation services.
Our purpose statement is a testament to our unwavering commitment across all areas of our operations, emphasizing our dedication to innovation, partnership, and exceptional service delivery. Our first strategic objective is Disciplined Capital Allocation. This strategic approach ensures our investments are focused on areas with the highest potential for returns, laying the groundwork for sustainable success and long-term value creation.
Our purpose statement is a testament to our unwavering commitment across all areas of our operations, emphasizing our dedication to innovation, partnership, and exceptional service delivery. Our first strategic objective is Disciplined Capital Allocation .
General consumer confidence and discretionary income may have a significant impact on our preneed sales success rate. Cemetery revenue that originated from preneed contracts represented approximately 69% and 63% of our total cemetery revenue for 2024 and 2023, respectively. At December 31, 2024, we had a backlog of 69,408 preneed cemetery contracts to be delivered in the future.
Cemetery revenue that originated from preneed contracts represented approximately 71% and 70% of our total operating cemetery revenue for 2025 and 2024, respectively. At December 31, 2025, we had a backlog of 65,681 preneed cemetery contracts to be delivered in the future.
Cemetery merchandise and services are often purchased in addition to cemetery property at the time of sale. The performance of these preneed cemetery contracts is secured by placing the funds collected in trust for the benefit of the customer, the proceeds of which will pay for such services at the time of need.
The performance of these preneed cemetery contracts is secured by placing the funds collected in trust for the benefit of the customer, the proceeds of which will pay for such services at the time of need. General consumer confidence and discretionary income may have a significant impact on our preneed sales success rate.
Market share for funeral homes and cemeteries is largely a function of reputation and heritage, although competitive pricing, professional service and attractive, well-maintained and conveniently located facilities are also important. Because of the importance of reputation and heritage, market share increases are usually gained over a long period of time.
We have observed new start-up competition in certain areas of the country, which may impact our profitability in certain markets. Market share for funeral homes and cemeteries is largely a function of reputation and heritage, although competitive pricing, professional service, and attractive, well-maintained and conveniently located facilities are also important.
The income from these perpetual care trusts provides funds necessary to maintain cemetery property and memorials in perpetuity.
The income from these perpetual care trusts provides funds necessary to maintain cemetery property and memorials in perpetuity. For additional information with respect to our trusts, see Part II, Item 8, Financial Statements and Supplementary Data, Notes 8 and 9.
Divestitures During the year ended December 31, 2024, we sold six funeral homes, one cemetery and real property for an aggregate of $12.0 million for a net loss of $1.2 million. OUR OPERATIONS See Part II, Item 8, Financial Statements and Supplementary Data, Note 20 for segment data related to our operations.
Additionally, we sold real property for $4.0 million resulting in a gain of $1.0 million. OUR OPERATIONS See Part II, Item 8, Financial Statements and Supplementary Data, Note 19 for segment data related to our operations.
For additional information with respect to our trusts, see Part II, Item 8, Financial Statements and Supplementary Data, Notes 8 and 9. 6 BUSINESS STRATEGY Our operations and business strategy are founded on the shared values of honesty, integrity and a belief in the power of people.
BUSINESS STRATEGY Our operations and business strategy are founded on the shared values of honesty, integrity, and a belief in the power of people.
They represent our commitment to pursue excellence relentlessly, innovate with purpose, and redefine industry standards through superior service. As part of our strategic objectives during 2024, we focused on the following: Enhanced local brands: We are committed to reinforcing the identity and presence of our local brands.
Our three strategic objectives are more than strategic imperatives. They represent our commitment to pursue excellence relentlessly, innovate with purpose, and redefine industry standards through superior service.
Our funeral home and cemetery operations face competition in the markets that they serve. Our primary competition in most of our markets is from local independent operators. We have observed new start-up competition in certain areas of the country, which may impact our profitability in certain markets.
Independent businesses, along with other privately-owned consolidators, represent the remaining 77% of industry revenue. Our funeral home and cemetery operations face competition in the markets that they serve. Our primary competition in most of our markets is from local independent operators.
This strategic objective champions the idea that every day presents a new opportunity to refine our processes, prioritize efficiencies, enhance our service, and exceed our prior achievements. It embodies our dedication to continuous advancement and is the essence of our purpose statement. These three strategic objectives are more than strategic imperatives.
Finally, at the heart of our ethos lies our third strategic objective, Relentless Improvement and a commitment to the pursuit of excellence in all that we do. This strategic objective champions the idea that every day presents a new opportunity to refine our processes, prioritize efficiencies, enhance our service, and exceed our prior achievements.
This disciplined investment strategy is pivotal in navigating the Company's path toward sustainable growth and profitability. Purposeful Growth, our second strategic objective, transcends mere expansion, emphasizing strategic and thoughtful planning. This approach to business development is not about increasing our size, but rather, enhancing our revenue and financial health through strategic, thoughtful, and data driven planning.
This approach to business development is not about increasing our size, but rather, enhancing our revenue and financial health through strategic, thoughtful, and data driven planning. It signifies our commitment to growing with intent and enriching our Company’s value proposition organically and through strategic partnerships.
The sale of preneed funeral services and cemetery property has increasingly been used by many companies as a marketing tool to build market share. There has been increasing competition from providers specializing in specific services, such as cremations, who offer minimal service and low-end pricing.
Because of the importance of reputation and heritage, market share increases are usually gained over a long period of time. The sale of preneed funeral services and cemetery property has increasingly been used by many companies as a marketing tool to build market share.
Effective January 2, 2025, John Enwright was appointed to serve as the Company’s Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer). In connection with the appointment of Mr.
(the “Company”) announced that the Board of Directors (the “Board”) appointed Steven D. Metzger to serve as the Company’s President and Chief Operating Officer, effective as of February 2, 2026. Mr. Metzger’s appointment was made in connection with certain executive leadership changes and appointments announced by the Company to better align with the Company’s business strategy.
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COMPANY DEVELOPMENTS Board of Directors and Leadership Changes On February 22, 2024, the Board of Directors (the “Board”) of the Company announced the conclusion of the Company’s review of strategic alternatives following the Board’s vote on February 21, 2024, to bring the strategic review process to a close.
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Acquisitions During the year ended December 31, 2025, we acquired eight funeral homes, one cemetery, and one cremation focused business in Florida for an aggregate price of $56.5 million. We acquired substantially all of the assets and assumed certain operating liabilities of these businesses.
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The strategic review process was first announced on June 29, 2023, which was overseen by the Board with assistance from experienced financial advisors and legal counsel. The Board unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company was in the best interests of the Company and its stockholders at that time.
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Additionally, we acquired the real property for one funeral home that we previously leased from a third party for a purchase price of $2.5 million. Divestitures During the year ended December 31, 2025, we sold thirteen funeral homes, four cemetery and real property for an aggregate of $40.4 million resulting in a gain of $1.5 million.
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February 22, 2024 (the “Transition Date”), the Company announced that Melvin C. Payne, the Company’s founder and former Chief Executive Officer, would cease to serve as Executive Chairman of the Board, but would remain on the Board until the Company’s 2024 annual meeting of stockholders, when the term for Class I directors is scheduled to expire.
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At December 31, 2025, we had a backlog of 93,286 preneed funeral contracts to be delivered in the future. Personalization and pre-planning continue to be two important trends in the funeral and cemetery industry; however, the national trend toward more cremations may be the most significant.
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Beginning on the Transition Date, Mr. Payne began serving as a special advisor to the Board and senior management in a consulting role. In connection with Mr.
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This strategic approach ensures our investments are focused on areas with the highest potential for returns, laying the groundwork for sustainable success and long-term value creation. This disciplined investment strategy is pivotal in navigating the Company's path toward sustainable growth and profitability. Purposeful Growth , our second strategic objective, transcends mere expansion, emphasizing strategic and thoughtful planning.
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Payne’s termination of employment, the employment-related provisions of his Employment Agreement with the Company, dated as of November 5, 2019, (as amended prior to the Transition Date, the “Employment Agreement”) terminated on the Transition Date. On February 21, 2024, the Company and Mr.
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As part of our strategic objectives during 2025, we focused on the following: Strategic mergers and acquisitions: We completed $59.0 million in strategic acquisitions while divesting $44.5 million in non-core assets, reinforcing our commitment to portfolio optimization and balance sheet discipline.
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Payne entered into a Transition Agreement (the “Transition Agreement”), setting forth the terms of his severance benefits and his consulting arrangement. Under the Transition Agreement, Mr. Payne is entitled to receive certain benefits, subject to the timely execution and non-revocation by Mr.
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These actions reflect a deliberate focus on quality over quantity, prioritizing businesses that align culturally, enhance earnings quality, and strengthen long-term scalability and value creation. Preneed funeral and cemetery sales: Preneed sales remain one of the most important drivers of long-term revenue, cash flow visibility, and margin expansion across our business.
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Payne and his spouse of waiver and release agreements in connection with the Transition Date and the end of the 12-month consulting term set forth in the Transition Agreement (the “Releases”).
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We expect these sales will generate high-quality backlog, support disciplined inventory monetization, and create durable customer relationships that translate into future at-need performance.
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These payments and benefits include the following: • Salary continuation for 24 months of $2.0 million; • 2023 annual bonus of $1.25 million; • Prorated 2024 bonus of $181,500; • Prorated settlement of performance awards of $3.0 million payable in cash; • Consulting payments of $1.0 million; • Payments for maintaining health benefits for Mr.
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In 2025, our consolidated preneed cemetery property production ended the year at $85 million, an increase of 8.4% over the prior year, while total cemetery production reached $143.6 million, an increase of 8.2% year over year, underscoring the effectiveness of our strategic focus and execution in this critical channel.
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Payne and his spouse for up to 36 months; and • Reimbursement of legal expenses up to $35,000. All of the payments and benefits provided under the Transition Agreement are subject to Mr. Payne’s continued compliance with certain confidentiality, non-competition, non-solicitation and non-disparagement provisions of the Employment Agreement, as well as compliance by Mr.
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In addition, insurance-funded preneed funeral contracts sold grew by approximately 27%, resulting in $9.6 million in preneed funeral commission income, which reflects an increase of 51% over the prior year. Modernized sales infrastructure and continued innovation: In the fourth quarter of 2025, we implemented our next-generation sales enablement platform.
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Payne and his spouse with their respective Releases. The Transition Agreement may be terminated by the Company upon the material breach of the Transition Agreement, the surviving provisions of the Employment Agreement or either of the Releases. Upon Mr.
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This enhanced platform significantly improved visibility into our preneed sales funnel, enabling more accurate and timely reporting and allowing our sales leaders to more effectively monitor lead progression, conversion efficiency, and overall sales productivity. Since the launch, we generated $2.6 million in preneed production through our next generation platform, representing 12% of total fourth-quarter preneed property sales.
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Payne’s death, any consulting fee payments would be paid to his estate. 3 On March 7, 2024, upon the recommendation of the Corporate Governance Committee of the Company, the Board realigned the Company’s classes of directors to provide for equal apportionment among the three classes as a result of the previous announcement of Mr.
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Systems that support scale: Throughout 2025, we continued to invest in systems and processes designed to support disciplined growth. We advanced our continuous improvement platform, modernized core technology infrastructure, and strengthened our data and reporting capabilities to improve decision-making speed and quality.
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Payne, a then Class I director, would remain on the Board until the Company’s 2024 annual meeting of stockholders, at which time his term would expire.
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We believe these investments in our systems will enable better visibility, greater accountability, and more consistent execution across the organization. Improved reliability, enhanced financial reporting, and more accessible data will allow our leaders at every level to operate with 5 confidence and clarity. Importantly, we believe these systems convert effort into repeatable outcomes, a prerequisite for sustainable growth.
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To facilitate the class realignment, on March 7, 2024, Julie Sanders resigned from the Board as a Class II director (term expiring in 2025), and, effective as of March 7, 2024, was re-elected by the Board to serve as a Class I director until the Company’s 2024 annual meeting of shareholders. Ms.
Added
Copies of the Code of Business Conduct and Ethics and the Corporate Governance Guidelines are also posted on our website under “Investors - Corporate Governance – Governance Documents.” Our Code of Business Conduct and Ethics applies to all of our officers, employees and directors, including our principal executive officer, principal financial officer, and principal accounting officer.
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Sanders continued to serve on the Audit, Compensation and Corporate Governance Committees of the Board. On March 7, 2024, upon the recommendation of the Corporate Governance Committee of the Company, the Board elected Chad Fargason to serve as the Company’s first Non-Executive Chairman of the Board, effective on that date. The election of Mr.
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Fargason as the Board’s Non-Executive Chairman was as a result of the previous announcement of Mr. Payne ceasing to serve as Executive Chairman of the Board of the Company, effective February 22, 2024. Effective March 25, 2024, Kathryn Shanley was appointed to serve as the Company’s Chief Accounting Officer (Principal Accounting Officer). In connection with the appointment of Ms.
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Shanley as the Company’s Chief Accounting Officer (Principal Accounting Officer), effective March 25, 2024, L. Kian Granmayeh ceased serving as the Company’s Principal Accounting Officer. At that time, Mr. Granmayeh continued to serve as the Company’s Executive Vice President, Chief Financial Officer, and Treasurer (Principal Financial Officer).
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On April 2, 2024, the Board revised the Director Compensation Policy to provide that each independent director is entitled to a quarterly retainer of $37,500 payable in cash and/or unrestricted shares of our common stock at the end of each quarter.
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The chair of the Board, so long as he or she is an independent director, and the chair of our Audit Committee shall be entitled to an additional annual retainer of $20,000, the chair of our Compensation Committee is entitled to an additional annual retainer of $15,000, and the chair of our Corporate Governance Committee is entitled to an additional annual retainer of $10,000, which are payable in quarterly installments at the end of each quarter.
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On May 14, 2024, the Board elected Julie Sanders to serve as chair of the Board’s Corporate Governance Committee, effective on that date, which was a result of the previous announcement of Chad Fargason, the prior chair of the Corporate Governance Committee, being elected to serve as the Company’s Non-Executive Chairman of the Board, effective March 7, 2024.
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On June 6, 2024, L. Kian Granmayeh informed the Company that he would resign from his position as Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) effective July 1, 2024 and would serve as a consultant for the Company for six months thereafter. Mr.
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Granmayeh’s resignation was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices, including any matters concerning the Company’s controls or any financial or accounting-related matters or disclosures. In connection with Mr.
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Granmayeh’s resignation, the Company’s Board appointed Kathryn Shanley, the Company’s Chief Accounting Officer (Principal Accounting Officer) as the Company’s Interim Principal Financial Officer, effective June 6, 2024, until a permanent replacement was identified. No new compensatory arrangements were entered into with Ms. Shanley in connection with her appointment as the Company’s interim Principal Financial Officer.
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On October 30, 2024, the Board elected Dr. Edmondo Robinson to serve as a Class II Director until the Company’s 2025 annual meeting of stockholders. Dr. Robinson was appointed to serve as a member of the Compensation, Audit and Corporate Governance Committees.
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Enwright as the Company’s Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer), effective January 2, 2025, Kathryn Shanley ceased serving as the Company’s Interim Principal Financial Officer. Ms. Shanley continues to serve as the Company’s Chief Accounting Officer (Principal Accounting Officer).
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Code of Business Conduct and Ethics Effective October 30, 2024, our Board, on the recommendation of the Board’s Audit Committee, approved various amendments to the Company’s Code of Business Conduct and Ethics (the “Code”), which applies to all directors, officers and employees of the Company and its subsidiaries.
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In addition to making certain technical and administrative updates, the amendments to the Code include, among other things, summarizing and clarifying the Company’s existing compliance requirements and also identifies and expands upon certain policies, including those related to suppliers and vendors, environmental, and discrimination, retaliation and harassment.
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The approval of the amendments to the Code did not relate to or result in any waiver, whether explicit or implicit, of any provision of the prior version of the Code.
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A copy of the Code, as amended, is available on the Corporate Governance section of our website. 4 Credit Facility On July 31, 2024, the Company entered into a fourth amendment, (the “Credit Facility Amendment”), to our senior secured revolving credit facility (as amended, the “Credit Facility”), with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent.
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The Credit Facility Amendment provided, among other things, for (i) the extension of the maturity date of the Credit Facility to July 31, 2029, provided that, if the Senior Notes (as defined in the Credit Facility) have a stated maturity date that is prior to July 31, 2029, then the maturity date shall instead be the date that is 91 days prior to the stated maturity date of the Senior Notes; (ii) the establishment of Term Secured Overnight Financing Rate (“SOFR”) as a benchmark rate and the removal of BSBY from the Credit Facility, including conforming revisions to certain defined terms under the Credit Facility; (iii) the conversion of each existing BSBY Rate Loan (as defined in the Credit Facility prior to giving effect to the Credit Facility Amendment) to a Term SOFR Loan (as defined in the Credit Facility); (iv) modifications to the definitions of “Applicable Rate” and “Applicable Fee Rate” to change the applicable rates and pricing levels set forth in each pricing grid; (v) the removal of certain mandatory prepayments arising from the issuance of either Equity Interests or Debt (as both are defined by the Credit Facility); and (vi) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein.
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This partnership agreement is projected to double our commission income in 2025, while expanding our market share across our funeral home portfolio.
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We are projecting this partnership to help drive year-over-year growth in preneed funeral sales of 20% over the next five years. 5 Trust funded contracts typically provide cash that is invested in various securities with the expectation that returns will exceed the growth factor in the insurance contracts.
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The cash flow and earnings from insurance contracts are more stable, but are generally lower than traditional trust fund investments. In markets that depend on preneed sales for market share, we supplement the arrangements written by our local funeral directors with sales sourced by our own sales counselors and by third-party sellers.
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In addition to preneed funeral contracts, we also offer “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 customer until the actual time of need.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

36 edited+20 added−8 removed127 unchanged
Biggest changeSignificant weather events, natural disasters or catastrophic events in these states or other key areas where our operations are concentrated could disrupt our business through injury to our employees or customer families, physical damage, closure or destruction of one or more of our locations, data centers or office facilities, or disrupt the delivery of goods or services by one or more of our vendors, any or all of which could adversely impact our operations or increase our costs, which would adversely affect our financial results.
Biggest changeSignificant weather events, natural disasters or catastrophic events in these states or other key areas where our operations are concentrated could disrupt our business through injury to our employees or customer families, physical damage, closure or destruction of one or more of our locations, data centers or office facilities, or disrupt the delivery of goods or services by one or more of our vendors, any or all of which could adversely impact our operations or increase our costs, which would adversely affect our financial results. 17 Information Technology and Internal Controls We rely significantly on information technology systems, software, or information security practices and those of our business partners or third-party providers, and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents or our actual or perceived failure to comply with any related regulatory requirements, could lead to adverse business consequences.
In the event of realized losses or market declines, we may be required to deposit portions or all of these amounts into the respective trusts in some future period. Increasing death benefits related to preneed funeral contracts funded through life insurance contracts may not cover future increases in the cost of providing a price-guaranteed funeral service.
In the event of realized losses or market declines, we may be required to deposit portions or all of these amounts into the respective trusts in some future period. Increasing death benefits related to preneed funeral contracts funded through life insurance policies may not cover future increases in the cost of providing a price-guaranteed funeral service.
Moreover, changes in environmental laws, regulations and enforcement policies occur frequently, and any changes that result in more stringent or costly emissions control or waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our results of operations, competitive position or financial condition. 15 RISKS RELATED TO OUR CREDIT FACILITY AND FINANCIAL ACTIVITIES Credit Facility and Debt Obligations Covenant restrictions in our debt instruments may limit our flexibility to operate and grow our business, and if we are not able to comply with such covenants, our lenders could accelerate our indebtedness, proceed against certain collateral or exercise other remedies, which could have a material adverse effect on us.
Moreover, changes in environmental laws, regulations and enforcement policies occur frequently, and any changes that result in more stringent or costly emissions control or waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our results of operations, competitive position or financial condition. 13 RISKS RELATED TO OUR CREDIT FACILITY AND FINANCIAL ACTIVITIES Credit Facility and Debt Obligations Covenant restrictions in our debt instruments may limit our flexibility to operate and grow our business, and if we are not able to comply with such covenants, our lenders could accelerate our indebtedness, proceed against certain collateral or exercise other remedies, which could have a material adverse effect on us.
Our and our subsidiaries’ level of indebtedness could have important consequences to us, including: • continuing to require us and certain of our subsidiaries to dedicate a substantial portion of our cash flow from operations to the payment of our indebtedness, thereby reducing the funds available for operations and any future business opportunities; 16 • limiting flexibility in planning for, or reacting to, changes in our business or the industry in which we operate; • placing us at a competitive disadvantage compared to our competitors that have less indebtedness; • increasing our vulnerability to adverse general economic or industry conditions; • making us and our subsidiaries more vulnerable to increases in interest rates, as borrowings under our Credit Facility are at variable rates; and • limiting our ability to obtain additional financing to fund working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
Our and our subsidiaries’ level of indebtedness could have important consequences to us, including: • continuing to require us and certain of our subsidiaries to dedicate a substantial portion of our cash flow from operations to the payment of our indebtedness, thereby reducing the funds available for operations and any future business opportunities; 14 • limiting flexibility in planning for, or reacting to, changes in our business or the industry in which we operate; • placing us at a competitive disadvantage compared to our competitors that have less indebtedness; • increasing our vulnerability to adverse general economic or industry conditions; • making us and our subsidiaries more vulnerable to increases in interest rates, as borrowings under our Credit Facility are at variable rates; and • limiting our ability to obtain additional financing to fund working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
In the event of a major disruption caused by the outbreak of pandemic diseases, or any new or emerging public health threats, we may lose the services of a number of our key employees or experience system interruptions, which could lead to impacts to our regular business operations, inefficiencies and reputational harm.
In the event of a major disruption caused by 16 the outbreak of pandemic diseases, or any new or emerging public health threats, we may lose the services of a number of our key employees or experience system interruptions, which could lead to impacts to our regular business operations, inefficiencies and reputational harm.
In addition, we maintain insurance coverage for various cybersecurity risks, which covered substantially all of the costs associated with our January 2021 ransomware attack, but it is possible that such insurance coverage may not fully insure all future costs or losses associated with other cybersecurity incidents.
In addition, we maintain insurance coverage for various cybersecurity risks, which covered substantially all the costs associated with our January 2021 ransomware attack, but it is possible that such insurance coverage may not fully insure all future costs or losses associated with other cybersecurity incidents.
We sell price-guaranteed preneed funeral contracts through various programs providing for future funeral services at prices prevailing when the agreements are signed. For preneed funeral contracts funded through life insurance contracts, we receive in cash a general agency commission from the third-party insurance company.
We sell price-guaranteed preneed funeral contracts through various programs providing for future funeral services at prices prevailing when the agreements are signed. For preneed funeral contracts funded through life insurance policies, we receive in cash a general agency commission from the third-party insurance company.
As a result of inflation, we have already experienced cost increases and surcharges 17 from our vendors and suppliers on merchandise and goods and may continue to experience additional cost increases in the future, which could be of greater magnitude than those experienced to date.
As a result of inflation, we have already experienced cost increases and surcharges from our vendors and suppliers on merchandise and goods and may continue to experience additional cost increases in the future, which could be of greater magnitude than those experienced to date.
Any of the foregoing could harm our business and we cannot 18 anticipate all the ways in which future epidemics and pandemics, including any new or emerging public health threats, would affect financial market conditions that could adversely impact our business.
Any of the foregoing could harm our business and we cannot anticipate all the ways in which future epidemics and pandemics, including any new or emerging public health threats, would affect financial market conditions that could adversely impact our business.
If our efforts to increase such sales are successful, however, our current cash flows could be materially and adversely affected, in the near term. Trust Fund and Life Insurance Contracts Our funeral and cemetery trust funds own investments in equity securities, fixed income securities, and mutual funds, which are affected by market conditions that are beyond our control.
If our efforts to increase such sales are successful, however, our current cash flows could be materially and adversely affected in the near term. Trust and Life Insurance Funded Contracts Our funeral and cemetery trust funds own investments in equity securities, fixed income securities, and mutual funds, which are affected by market conditions that are beyond our control.
Failure to successfully implement our Standards Operating Model in our funeral and cemetery operations could have a material adverse effect on our financial condition, results of operations and cash flows. 10 Our ability to execute our growth strategy is highly dependent upon our ability to successfully identify suitable acquisition candidates and negotiate transactions on favorable terms.
Failure to successfully implement our Standards Operating Model in our funeral and cemetery operations could have a material adverse effect on our financial condition, results of operations, and cash flows. 8 Our ability to execute our growth strategy is highly dependent upon our ability to successfully identify suitable acquisition candidates and negotiate transactions on favorable terms.
Increased price competition in the future could further reduce revenue, profits and our preneed backlog. 11 Change in Preneed Sales Our ability to generate preneed sales depends on a number of factors, including sales incentives and local and general economic conditions. Significant declines in preneed sales would reduce our backlog and future revenue and could reduce our future market share.
Increased price competition in the future could further reduce revenue, profits and our preneed backlog. 9 Change in Preneed Sales Our ability to generate preneed sales depends on a number of factors, including sales incentives and local and general economic conditions. Significant declines in preneed sales would reduce our backlog and future revenue and could reduce our future market share.
From time to time, we engage in discussions with third parties about potential divestitures of one or more of our businesses that, if fully consummated, could result in the divestiture of a material amount of assets and contribution to our results of operations that have historically contributed to our results of operations.
From time to time, we engage in discussions with third parties about potential divestitures of one or more of our businesses that, if fully consummated, could result in the divestiture of a material amount of assets that have historically contributed to our results of operations.
For additional information, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Estimates. 12 Earnings from and principal of trust funds could be reduced by changes in financial markets and the mix of securities owned.
For additional information, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Estimates. 10 Earnings from and principal of trust funds could be reduced by changes in financial markets and the mix of securities owned.
Our expectation is that, over time, the Standards Operating Model will result in improving field-level margins, market share, customer satisfaction and overall financial performance, but there is no assurance that these goals will be met.
Our expectation is that, over time, the Standards Operating Model will result in improved field-level margins, market share, customer satisfaction and overall financial performance, but there is no assurance that these goals will be met.
Changes in federal, state, or local tax laws, adverse tax audit results, or adverse tax rulings on positions taken could have a material adverse effect on the results of our operations, financial condition, or cash flows. 13 New or revised tax laws or regulations could have a material effect on our financial statements.
Changes in federal, state, or local tax laws, adverse tax audit results, or adverse tax rulings on positions taken could have a material adverse effect on the results of our operations, financial condition, or cash flows. 11 New or revised tax laws or regulations could have a material effect on our financial statements.
The following table summarizes our investment returns (realized and unrealized), excluding certain fees, on our trust funds for the years ended December 31, 2024, 2023 and 2022: 2024 2023 2022 Preneed funeral trust funds 11.1 % 17.3 % 1.0 % Preneed cemetery trust funds 12.7 % 19.1 % 0.7 % Perpetual care trust funds 13.2 % 20.2 % (0.2) % Generally, earnings or gains and losses on our preneed funeral and cemetery trust investments are recognized, and we withdraw cash, when the underlying service is performed, merchandise is delivered, or upon contract cancellation.
The following table summarizes our investment returns (realized and unrealized), excluding certain fees, on our trust funds for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Preneed funeral trust funds 6.1 % 11.1 % 17.3 % Preneed cemetery trust funds 6.6 % 12.7 % 19.1 % Perpetual care trust funds 6.6 % 13.2 % 20.2 % Generally, earnings or gains and losses on our preneed funeral and cemetery trust investments are recognized, and we withdraw cash, when the underlying service is performed, merchandise is delivered, or upon contract cancellation.
There is no assurance that we will be able to continue to identify acquisition candidates that meet our criteria or that we will be able to reach terms with identified candidates for transactions that are acceptable to us, and even if we do, we may not be able to successfully complete the transaction or integrate the new business into our existing business.
There is no assurance that we will be able to continue to identify acquisition candidates that meet our criteria or that we will be able to reach terms with identified candidates for transactions that are acceptable to us, and even if we do, we may not be able to close the transaction or successfully integrate the new business into our existing portfolio.
However, we may not correctly anticipate or identify trends in consumer 14 preferences, or we may identify them later than our competitors. In addition, any strategies we may implement to address these trends may prove incorrect or ineffective.
However, we may not correctly anticipate or identify trends in consumer 12 preferences, or we may identify them later than our competitors. In addition, any strategies we may implement to address these trends may prove incorrect or ineffective.
Although we may take measures to mitigate the effects of these impacts, if these measures are not effective, there can be no assurance that such changes in U.S. trade policy or in laws and policies governing foreign trade would not materially and adversely affect our business, financial condition, results of operations and liquidity.
Although we may take measures to mitigate the effects of these impacts, if these measures are not effective, there can be no assurance that such changes in U.S. trade policy or in laws and policies governing foreign trade would not materially and adversely affect our business, financial condition, results of operations and liquidity. 15 We may be adversely affected by the effects of inflation.
Any future variations of the death rate may cause our revenue to fluctuate and our results of operations to lack predictability. The increasing number of cremations in the United States could cause revenue to decline because we could lose market share to firms specializing in cremations and because our average revenue for cremations is lower than that for traditional burials.
Any future variations of the death rate may cause our revenue to fluctuate and our results of operations to lack predictability. The increasing number of cremations in the U.S. could cause revenue to decline because we could lose market share to firms specializing in cremations and because our average revenue for cremations is lower than that for traditional burials.
Declines in the number of deaths could cause atneed sales of funeral and cemetery services, property and merchandise to decline, which could decrease revenue. Although the United States Bureau of the Census estimates that the number of deaths in the United States will increase in the future, longer life spans could reduce the rate of deaths.
Declines in the number of deaths could cause atneed sales of funeral and cemetery services, property and merchandise to decline, which could decrease revenue. Although the U.S. Bureau of the Census estimates that the number of deaths in the U.S. will increase in the future, longer life spans could reduce the rate of deaths.
Our traditional cemetery and funeral service operations face competition from the increasing number of cremations in the United States. Industry studies indicate that the percentage of cremations has increased every year, and this trend is expected to continue into the future.
Our traditional cemetery and funeral service operations face competition from the increasing number of cremations in the U.S.. Industry studies indicate that the percentage of cremations has increased every year, and this trend is expected to continue into the future.
We may be adversely affected by the effects of inflation. Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure or by reducing the amount of discretionary income consumers have available to spend on our services.
Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure or by reducing the amount of discretionary income consumers have available to spend on our services.
The funeral and cemetery industry is characterized by a large number of locally owned, independent operations in the United States and a large number of operations owned by publicly and privately held funeral home and cemetery consolidators.
The funeral and cemetery industry is characterized by a large number of locally owned, independent operations in the U.S. and a large number of operations owned by publicly and privately held funeral home and cemetery consolidators.
In addition, our effective tax rate could be adversely affected by changes in the mix of earnings in states with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations, or changes in our interpretations of tax laws.
In addition, our effective tax rate could be adversely affected by changes in the mix of earnings in states with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations, changes to our business structure or operations, including acquisitions or divestitures, or changes in our interpretations of tax laws.
As of December 31, 2024, we had $542.5 million of total debt (excluding debt issuance costs, debt discounts and lease obligations), consisting of $5.5 million of acquisition debt (consisting of deferred purchase price and promissory notes payable to sellers of businesses and real property we purchased), $400.0 million of our Senior Notes and $137.0 million of outstanding borrowings under our Credit Facility, with $110.8 million of availability under our Credit Facility after giving effect to $2.2 million of outstanding letters of credit.
As of December 31, 2025, we had $532.9 million of total debt (excluding debt issuance costs, debt discounts and lease obligations), consisting of $6.2 million of acquisition debt (consisting of deferred purchase price and promissory notes payable to sellers of businesses and real property we purchased), $400.0 million of our Senior Notes and $126.7 million of outstanding borrowings under our Credit Facility, with $121.1 million of availability under our Credit Facility after giving effect to $2.2 million of outstanding letters of credit.
New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be interpreted, amended, or applied in a manner that has a material effect on us, which could materially impact our business and financial condition.
We may be subject to additional tax liabilities and penalties resulting from new tax legislation or regulations, which could be enacted at any time, and changes to existing tax laws or regulations, which could be interpreted, amended, or applied in a manner that has a material effect on us, which could materially impact our business and financial condition.
As part of our growth strategy, we periodically review our businesses which may no longer be aligned with our strategic business plan and long-term objectives and, as a result of these reviews of our businesses, we may pursue additional divestitures.
Divestitures could negatively impact our business and retained liabilities from businesses that we sell could adversely affect our financial results. As part of our growth strategy, we periodically review our businesses which may no longer be aligned with our strategic business plan and long-term objectives and, as a result of these reviews of our businesses, we may pursue additional divestitures.
Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price. The accuracy of our financial reporting depends on the effectiveness of our internal control over financial reporting.
For additional information regarding the Company’s cybersecurity risk management, strategy, and governance, refer to Item 1C. Cybersecurity. Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price. The accuracy of our financial reporting depends on the effectiveness of our internal control over financial reporting.
Changes in U.S. foreign trade policies could lead to the imposition of additional trade barriers and tariffs on the foreign import of certain materials and products.
Changes in U.S. foreign trade policies could lead to the imposition of additional trade barriers and tariffs on the foreign import of certain materials and products. For example, effective August 1, 2025, the U.S. adopted new and increased tariffs on countries and specific goods, subject to evolving exemptions.
We will continue to evaluate the impact of the IRA, along with any other new or revised tax laws or regulations, as such information becomes available. Litigation and Claims Unfavorable results of litigation could have a material adverse impact on our financial statements. We are subject to a variety of claims and lawsuits in the ordinary course of our business.
Litigation and Claims Unfavorable results of litigation could have a material adverse impact on our financial statements. We are subject to a variety of claims and lawsuits in the ordinary course of our business.
Various state governments, notably California, New York, Nevada and Virginia, have enacted or enhanced data privacy regulations, and other state governments are considering establishing similar or stronger protections. These regulations impose certain obligations for securing, and potentially removing, specified personal information in our systems, and for apprising individuals of the information we have collected about them.
These regulations impose certain obligations for securing, and potentially removing, specified personal information in our systems, and for apprising individuals of the information we have collected about them.
Seasonal fluctuations in the death rate may be further affected by epidemics and pandemics, including any new or emerging public health threats.
Seasonal fluctuations in the death rate may be further affected by epidemics and pandemics, including any new or emerging public health threats. These unexpected fluctuations may not only increase death rates during the affected period, but also may subsequently decrease death rates following the affected period as a result of an acceleration of death rates.
Based on the results of our annual goodwill and intangible assets impairment test we performed as of August 31, 2024 and our annual review of long-lived assets and leases at December 31, 2024, we determined that there were factors that would indicate the need to perform an additional quantitative impairment test for tradenames for certain funeral home businesses.
Based on the results of our annual goodwill and intangible assets impairment test we performed as of August 31, 2025 and our annual review of long-lived assets and leases as of December 31, 2025, we concluded that there were no impairments of our goodwill, intangible assets or other long-lived assets and leases.
For example, in November 2020, California voters 19 approved Proposition 24 (Consumer Personal Information Law and Agency Initiative), which went into effect as of January 1, 2023 and has increased the data privacy requirements for our business. Despite our efforts, any noncompliance could result in our incurring substantial penalties and reputational damage.
With respect to CCPA and CPRA, both have increased the data privacy requirements and costs for our business. Despite our efforts, any noncompliance could result in our incurring substantial penalties and reputational damage.
Removed
We intend to apply standards established under our strategic acquisition framework to evaluate acquisition candidates, and there is no assurance that we will continue to be successful in doing so or that we will find attractive candidates that satisfy these standards.
Added
For example, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA made several key provisions of the Tax Cuts and Jobs Act of 2017 permanent, including 100% bonus depreciation, the immediate expensing of domestic research costs, and the introduction of a favorable modification to the business interest expense limitation.
Removed
Due in part to the presence of competitors who have been in certain markets longer than we have, such acquisitions or investments may be more difficult or expensive than we anticipate. Divestitures could negatively impact our business and retained liabilities from businesses that we sell could adversely affect our financial results.
Added
Together, these changes accelerate the timing of certain tax deductions in the current period that allow for reductions in cash taxes. The Company adopted the relevant provisions during the third quarter of 2025 and determined that the OBBBA did not have a material effect on the Company's financial statements.
Removed
For example, on August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law which includes a tax and spending package that introduced several tax-related provisions, including a 15% corporate alternative minimum tax on corporations that have an average of $1 billion adjusted financial statement income over a consecutive three-year period and a 1% excise tax on certain corporate stock repurchases.
Added
In October 2025, the U.S. government announced a series of new and expanded tariffs on imports from China and other countries, including a 100% tariff on certain categories of goods and increased duties.
Removed
The impact of these provisions became effective for our Company beginning on January 1, 2023. We have reviewed and assessed the provisions of the IRA, and we do not currently believe that the IRA will have a material impact on our business, operating results, and financial condition.
Added
While these measures were scheduled to take effect beginning November 1, 2025, the U.S. government announced on October 30, 2025 a temporary pause on the implementation of these tariffs, along with China agreeing to pause the implementation of certain retaliatory measures scheduled to take effect in response.
Removed
These unexpected fluctuations may not only increase death rates during the affected period, like we saw with the recent COVID-19 pandemic, but also may subsequently decrease death rates following the affected period as a result of an acceleration of death rates.
Added
These actions have caused substantial uncertainty and volatility in financial markets and may result in additional retaliatory measures or costs on U.S. goods.
Removed
For example, effective February 4, 2025, the U.S. government implemented an additional tariff on goods being imported from China and announced additional tariffs for goods imported into the United States from Mexico and Canada beginning in March 2025.
Added
Additionally, we take steps to secure our information systems and software and any access provided by our business partners or third-party service providers, including our computer systems, intranet and internet sites, email and other telecommunications and data networks.
Removed
As a result of this additional quantitative impairment test, we recorded an impairment to the tradenames of certain funeral home businesses of $0.6 million, as the carrying amount of these tradenames exceeded their fair value. We concluded that there were no impairments of our goodwill or other long-lived assets and leases.
Added
However, the security measures we have implemented may not be effective and our systems may be vulnerable to theft, loss, damage, and interruption from a number of potential sources and events, including unauthorized access or security breaches, data privacy breaches, natural or man-made disasters, cyber-attacks, computer viruses, malware, phishing, denial of service attacks, power loss, or other disruptive events.
Removed
Information Technology and Internal Controls We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents could harm our ability to operate our business effectively.
Added
Information technology security threats have been increasing in frequency and sophistication. Cyber-attacks may be random, coordinated, or targeted, including sophisticated computer crime threats.
Added
Various state governments, notably California, New York, Nevada and Virginia, have enacted or enhanced data privacy regulations, including data breach notification requirements, consumer protection laws, and personal data privacy laws, and other state governments are considering establishing similar or stronger protections.
Added
For example, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018 (“CCPA”), which took effect on January 1, 2023, and expanded consumer rights related to sharing of personal data, granted additional personal-data rights to consumers, removed the exceptions for business-to-business and employment data, and removed the 30-day window to cure alleged noncompliance before being subject to administrative enforcement.
Added
We have incorporated, and may continue incorporating, traditional and generative artificial intelligence (“AI”) solutions into certain of our information systems and operations with the intent to enhance efficiency and effectiveness, and these solutions may become important in our operations over time.
Added
For example, we have incorporated AI and generative AI to automate certain manual administrative processes and increase productivity within our sale terms.
Added
The continued evolution and use of this technology, including cloud-based computing and AI, creates opportunities for the potential loss or misuse of personal data that was collected, used, stored, or transferred in our business operations and systems, and flaws, breaches or malfunctions in these systems could lead to operational disruptions, data loss, including for example unintentional dissemination or intentional destruction of confidential information stored in our or our third party providers’ systems, or erroneous decision-making, which may result in significantly increased business and security costs, reputational damage, administrative penalties, or costs related to defending legal claims.
Added
AI technologies may be costly and require significant resources to either license from third-parties or develop, which may be difficult to integrate, launch, and manage, if at all, and require periodic upgrades.
Added
There is also a risk that we may not have access to technology or qualified personnel resources to adequately incorporate or adopt ongoing advancements into any AI technologies, including access to the licensing of key 18 intellectual property from third parties.
Added
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
Added
The legal and regulatory landscape and industry standards surrounding AI technologies are rapidly evolving and remains uncertain, and compliance may impose significant operational costs and may limit our ability or require significant resources to develop, deploy, use or maintain AI technologies.
Added
In addition, our information technology systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems.
Added
This enables us to keep pace with continuing changes in information processing technology, evolving legal and regulatory standards, the increasing need to protect employee and customer information, changes in the techniques used to obtain unauthorized access to data and information systems, and the information technology needs associated with our evolving products.
Added
There can be no assurance that our efforts (including, but not limited to, consolidating, protecting, upgrading, and expanding our systems and capabilities, continuing to build security into the design of our products, and developing new systems to keep pace with continuing changes in information processing technology, including, but not limited to, AI technologies) will be successful or that additional systems issues will not arise in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed13 unchanged
Biggest changeRisk Factors - General Risks – Information Technology and Internal Controls - We rely significantly on information technology and any failure, 20 inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents could harm our ability to operate our business effectively.” GOVERNANCE We involve multiple levels of oversight as a part of our approach to cybersecurity risk management.
Biggest changeRisk Factors - General Risks – Information Technology and Internal Controls - We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents could harm our ability to operate our business effectively.” GOVERNANCE We involve multiple levels of oversight as a part of our approach to cybersecurity risk management.
We also have controls in place to ensure any third-party access to our internal systems adhere to internal cybersecurity safeguards, as well as firewalling any access from such third-parties, including service providers, through a secure virtualization layer.
We also have controls in place to ensure any third-party access to our internal systems adhere to internal cybersecurity safeguards, as well as firewalling any 19 access from such third-parties, including service providers, through a secure virtualization layer.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−0 removed0 unchanged
Biggest changeOur support center is located in Houston, Texas, where we lease approximately 48,000 square feet of office space. 21 The following table sets forth certain information as of December 31, 2024, regarding our properties used by the funeral home segment and by the cemetery segment identified by state: Number of Funeral Homes Number of Cemeteries State Owned Leased (1) Owned Managed California 22 6 7 — Connecticut 7 2 — — Florida 11 5 5 — Georgia 3 — — — Idaho 4 1 3 — Illinois 2 — 1 — Kansas 2 — — — Kentucky 5 1 — — Louisiana 3 1 1 — Massachusetts 7 — — — Michigan 2 — — — Montana 2 1 1 — Nevada 2 — 2 1 New Jersey 1 1 — — New Mexico 1 — — — New York 10 1 — — North Carolina 11 1 2 — Ohio 4 — — — Oklahoma 5 — 2 — Pennsylvania 2 — — — Rhode Island 4 — — — Tennessee 4 — — — Texas 15 1 5 — Virginia 8 1 1 — Washington 2 — — — Wisconsin 1 — — — Total 140 22 30 1 (1) The leases, with respect to these funeral homes, generally have remaining terms ranging from one to twenty years, and generally, we have the right to renew past the initial terms and have a right of first refusal on any proposed sale of the property where these funeral homes are located.
Biggest changeOur support center is located in Houston, Texas, where we lease approximately 48,000 square feet of office space. 20 The following table sets forth certain information as of December 31, 2025, regarding our properties used by the funeral home segment and by the cemetery segment identified by state: Number of Funeral Homes Number of Cemeteries State Owned Leased (1) Owned California 24 4 7 Connecticut 3 2 — Florida 19 5 6 Georgia 3 — — Idaho 4 1 3 Illinois 2 — 1 Kansas 2 — — Kentucky 5 1 — Louisiana 3 1 1 Massachusetts 6 — — Michigan 2 — — New Jersey 1 1 — New Mexico 1 — — New York 6 1 — North Carolina 11 1 2 Ohio 4 — — Oklahoma 5 — 2 Pennsylvania 2 — — Rhode Island 3 — — Tennessee 4 — — Texas 15 1 5 Virginia 8 1 1 Washington 2 — — Wisconsin 1 — — Total 136 19 28 (1) The leases, with respect to these funeral homes, generally have remaining terms ranging from one to twenty years, and generally, we have the right to renew past the initial terms and have a right of first refusal on any proposed sale of the property where these funeral homes are located.
LEGAL PROCEEDINGS. For more information regarding legal proceedings see Part II, Item 8, Financial Statements and Supplementary Data, Note 15. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 22 PART II
LEGAL PROCEEDINGS. For more information regarding legal proceedings see Part II, Item 8, Financial Statements and Supplementary Data, Note 15. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II 21
The following table sets forth the number of funeral homes and cemeteries owned and operated by us for the periods presented: Years Ended December 31, 2024 2023 2022 Funeral homes at beginning of period 171 171 170 Acquisitions — 3 6 Divestitures (7) (2) (4) Mergers of funeral homes (2) (1) (1) Funeral homes at end of period 162 171 171 Cemeteries at beginning of period 32 32 31 Acquisitions — 2 1 Divestitures (1) (2) — Cemeteries at end of period 31 32 32 ITEM 3.
The following table sets forth the number of funeral homes and cemeteries owned and operated by us for the periods presented: Year ended December 31, 2025 2024 2023 Funeral homes at beginning of period 162 171 171 Acquisitions 8 — 3 Divestitures (13) (7) (2) Mergers of funeral homes (2) (2) (1) Funeral homes at end of period 155 162 171 Cemeteries at beginning of period 31 32 32 Acquisitions 1 — 2 Divestitures (4) (1) (2) Cemeteries at end of period 28 31 32 ITEM 3.
ITEM 2. PROPERTIES. At December 31, 2024, we operated 162 funeral homes in 26 states and 31 cemeteries in 11 states. We own the real property and buildings for 140 of our funeral homes and lease 22 facilities.
ITEM 2. PROPERTIES. At December 31, 2025, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states. We own the real property and buildings for 136 of our funeral homes and lease 19 facilities. We own 28 cemeteries.
The 31 cemeteries that we operate have developed cemetery property of approximately 142,000 and 162,000 units available-for-sale at December 31, 2024 and 2023, respectively. In addition, we own approximately 496 acres that are available for future development or sale. We anticipate having a sufficient inventory of lots to maintain our property sales for the foreseeable future.
In addition, we own approximately 487 acres that are available for future development or sale. We anticipate having a sufficient inventory of lots to maintain our property sales for the foreseeable future.
We own 30 cemeteries and operate one cemetery under a long-term contract with a municipality, which we refer to as a managed property. We operate 18 funeral homes in combination with cemeteries as these locations are physically located on the same property or in very close proximity and are under the same leadership.
We operate 18 funeral homes in combination with cemeteries as these locations are physically located on the same property or in very close proximity and are under the same leadership. The 28 cemeteries that we operate have developed cemetery property of approximately 131,000 and 142,000 units available-for-sale at December 31, 2025 and 2024, respectively.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare repurchase activity is as follows (dollar value in thousands): Years Ended December 31, 2024 2023 2022 Number of Shares Repurchased — — 695,496 Average Price Paid Per Share $ — $ — $ 49.22 Dollar Value of Shares Repurchased $ — $ — $ 34,234 Our shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations.
Biggest changeOur shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations. Shares purchased pursuant to the repurchase program are currently held as treasury stock. No shares were repurchased during the years ended December 31, 2025, 2024 and 2023.
Performance data for Carriage, the Russell 3000 Index and the 2024 Peer Group is provided as of the last trading day of each of our last five fiscal years.
Performance data for Carriage, the Russell 3000 Index and the Peer Group is provided as of the last trading day of each of our last five fiscal years.
RECENT SALES OF UNREGISTERED SECURITIES During the year ended December 31, 2024, we did not have any sales of securities in transactions that were not registered under the Securities Act of 1933 (as amended, the “Securities Act”) that have not been reported in a Form 8-K or Form 10-Q.
RECENT SALES OF UNREGISTERED SECURITIES During the year ended December 31, 2025, we did not have any sales of securities in transactions that were not registered under the Securities Act of 1933 (as amended, the “Securities Act”) that have not been reported in a Form 8-K or Form 10-Q.
On February 23, 2022, our Board authorized an increase in our share repurchase program to permit us to purchase up to an additional $75.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding in accordance with Rule 10b-18 of the Exchange Act, which totaled up to $265.0 million in share repurchase authorizations.
On February 23, 2022, our Board authorized an increase in our share repurchase program to permit us to purchase up to an additional $75.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding in accordance with Rule 10b-18 of the Exchange Act, which totaled up to $48.9 million in share repurchase authorizations.
The graph assumes that the value of the investment in our common stock, the Russell 3000 Index, the 2023 Peer Group and the 2024 Peer Group was $100 on the last trading day of December 2019, and that all dividends were reinvested.
The graph assumes that the value of the investment in our common stock, the Russell 3000 Index and the Peer Group was $100 on the last trading day of December 2020, and that all dividends were reinvested.
Each share is entitled to one vote on matters requiring the vote of stockholders. We believe there are approximately 6,900 beneficial owners of our common stock.
Each share is entitled to one vote on matters requiring the vote of stockholders. We believe there are approximately 9,300 beneficial owners of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET INFORMATION Our common stock is traded on the New York Stock Exchange under the symbol “CSV.” At February 24, 2025, there were 15,649,702 shares of our common stock outstanding. The shares of common stock outstanding are held by approximately 300 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET INFORMATION Our common stock is traded on the New York Stock Exchange under the symbol “CSV.” At February 19, 2026, there were 15,751,228 shares of our common stock outstanding. The shares of common stock outstanding are held by approximately 300 stockholders of record.
At December 31, 2024, our share repurchase program had $48.9 million authorized for repurchases. 23 The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Dollar Value of Shares That May Yet Be Purchased Under the Program (1) October 1, 2024 - October 31, 2024 — $ — — $ 48,898,769 November 1, 2024 - November 30, 2024 — $ — — $ 48,898,769 December 1, 2024 - December 31, 2024 — $ — — $ 48,898,769 Total for quarter ended December 31, 2024 — — (1) See the first paragraph under the caption “ Purchases of Equity Securities by the Issuer ” for more information on our publicly announced share repurchase program. 24 STOCKHOLDER RETURN PERFORMANCE GRAPH The following line graph below compares the yearly change in cumulative total stockholder return over a 5-year period on our common stock relative to the cumulative total returns of the Russell 3000 Index (the “Russell 3000”), the peer group shown in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Peer Group”), which comprised of SCI, Matthews International Corp.
The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Dollar Value of Shares That May Yet Be Purchased Under the Program (1) October 1, 2025 - October 31, 2025 — $ — — $ 48,898,769 November 1, 2025 - November 30, 2025 — $ — — $ 48,898,769 December 1, 2025 - December 31, 2025 — $ — — $ 48,898,769 Total for quarter ended December 31, 2025 — — (1) See the first paragraph under the caption “ Purchases of Equity Securities by the Issuer ” for more information on our publicly announced share repurchase program. 22 STOCKHOLDER RETURN PERFORMANCE GRAPH The following line graph below compares the yearly change in cumulative total stockholder return over a 5-year period on our common stock relative to the cumulative total returns of the Russell 3000 Index (the “Russell 3000”) and a peer group selected by the Company comprised of SCI and Matthews International Corp.
(“Matthews”) and Park Lawn Corporation (“Park Lawn”), and our new peer group consisting of SCI and Matthews (the “2024 Peer Group”). We use a peer group index, as we believe there is no relevant published industry or line-of-business index that reflects the companies against which we compete in our industry.
("Matthews") (the "Peer Group"). We use a peer group index, as we believe there is no relevant published industry or line-of-business index that reflects the companies against which we compete in our industry. The returns of each member of the Peer Group are weighted according to their respective stock market capitalization as of the beginning of each period measured.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Carriage, the Russell 3000 Index, the 2023 Peer Group and the 2024 Peer Group ITEM 6. [RESERVED] 25
The stock price performance included in this graph is not necessarily indicative of future stock price performance. ITEM 6. [RESERVED] 23
Removed
Shares purchased pursuant to the repurchase program are currently held as treasury stock.
Added
See Note X of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to our share repurchase program. The information discussed therein is incorporated by reference in its entirety into this Part I, Item 1 of this Annual Report.
Removed
We removed Park Lawn from our 2024 Peer Group as a result of Park Lawn’s going private transaction and related delisting from the Toronto Stock Exchange as of August 12, 2024.
Added
At December 31, 2025, our share repurchase program had $48.9 million authorized for repurchases.
Removed
The returns of each member of the 2023 Peer Group and 2024 Peer Group are weighted according to their respective stock market capitalization as of the beginning of each period measured.
Removed
For the 2023 Peer Group, as a result of Park Lawn’s delisting on August 12, 2024, the stock performance data as of December 31, 2024, reflects SCI’s and Matthews’ total cumulative return only.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCemetery Segment The following table sets forth certain information regarding our revenue and adjusted operating profit for our cemetery operations (in thousands): Years Ended December 31, 2024 2023 Revenue: Operating $ 125,095 $ 101,150 Divested 156 1,111 Other 15,833 15,483 Total $ 141,084 $ 117,744 Adjusted operating profit (loss) Operating $ 57,233 $ 40,899 Divested (30) 209 Other 15,458 14,971 Total $ 72,661 $ 56,079 The following consolidated measures reflect the significant metrics over this comparative period: Preneed revenue as a percentage of operating revenue 69% 63% Preneed revenue (in thousands) $ 86,745 $ 64,498 Atneed revenue (in thousands) $ 38,506 $ 37,763 Number of preneed interment rights sold 14,523 11,813 Average price per interment right sold $ 5,374 $ 5,007 Cemetery operating revenue increased $23.9 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily as a result of a 22.9% increase in the number of preneed interment rights sold and a 7.3% increase in the average price per preneed interment right sold.
Biggest changeThese increases are primarily due to the increase in our general agency commission income earned on the sale of preneed insurance policies as we continue to focus on growth of our preneed funeral sales through our strategic partnership with a national insurance provider that began during the second quarter of 2023. 30 Cemetery Segment The following table sets forth certain information regarding our revenue and adjusted operating profit for our cemetery operations (in thousands): Year Ended December 31, 2025 2024 Inc/(Dec) % Change Revenue: Operating $ 130,631 $ 120,060 $ 10,571 8.8 % Divested 1,383 5,191 (3,808) (73.4) % Other 16,214 15,833 381 2.4 % Total $ 148,228 $ 141,084 $ 7,144 5.1 % Adjusted operating profit Operating $ 58,653 $ 55,800 $ 2,853 5.1 % Divested 430 1,403 (973) (69.4) % Other 15,891 15,458 433 2.8 % Total $ 74,974 $ 72,661 $ 2,313 3.2 % The following measures reflect the significant operating metrics over this comparative period: Preneed revenue as a percentage of operating revenue 70.8% 70.3% 0.5% 0.7 % Preneed revenue (in thousands) $ 92,468 $ 84,368 $ 8,100 9.6 % Atneed revenue (in thousands) $ 38,163 $ 35,692 $ 2,471 6.9 % Number of preneed interment rights sold 14,407 13,910 497 3.6 % Average price per interment right sold $ 5,836 $ 5,486 $ 350 6.4 % Cemetery operating revenue increased $10.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily as a result of a 6.4% increase in the average price per preneed interment right sold coupled with a 3.6% increase in the number of preneed interment rights sold.
To the extent that information not available to us at the closing date subsequently becomes available during the allocation period, we may adjust goodwill, intangible assets, assets or liabilities associated with the acquisition. When we acquire a cemetery, we utilize an internal and external approach to determine the fair value of the cemetery property.
To the extent that information not available to us at the closing date subsequently becomes available during the allocation period, we may adjust goodwill, intangible assets, and other assets or liabilities associated with the acquisition. When we acquire a cemetery, we utilize an internal and external approach to determine the fair value of the cemetery property.
Our methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples of comparable companies operating in the same industry as the individual reporting units.
Our first methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples of comparable companies operating in the same industry as the individual reporting units.
More broadly, the U.S. economy continues to experience the impact of several years of higher rates of inflation, which has impacted a wide variety of industries and sectors, with consumers facing rising prices.
More broadly, the U.S. economy continues to experience the 24 impact of several years of higher rates of inflation, which has impacted a wide variety of industries and sectors, with consumers facing rising prices.
The letter of credit will expire on November 25, 2025 and is expected to automatically renew annually. The obligations related to our off-balance sheet arrangements are significant to our future liquidity; however, although we can provide no assurances, we anticipate that these obligations will be funded from cash provided from our operating activities.
The letter of credit will expire on November 25, 2026 and is expected to automatically renew annually. The obligations related to our off-balance sheet arrangements are significant to our future liquidity; however, although we can provide no assurances, we anticipate that these obligations will be funded from cash provided from our operating activities.
RECENT ACCOUNTING PRONOUNCEMENTS, ACCOUNTING CHANGES AND OTHER REGULATIONS For discussion of recent accounting pronouncements and accounting changes, see Part II, Item 8, Financial Statements and Supplementary Data, Note 2.
RECENT ACCOUNTING PRONOUNCEMENTS, ACCOUNTING CHANGES AND OTHER REGULATIONS For discussion of recent accounting pronouncements and accounting changes, see Part II, Item 8, Financial Statements and Supplementary Data, Note 2. 33
At December 31, 2024, our unrecognized tax benefit reserve for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property for the benefit derived from carrying back losses to tax years with a higher effective tax rate than the current 21.0% rate.
At December 31, 2025, our unrecognized tax benefit reserve for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property for the benefit derived from carrying back losses to tax years with a higher effective tax rate than the current 21.0% rate.
Further, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future liquidity may be adversely affected. For additional information regarding known material factors that could cause cash flow or access to and cost of finance sources to differ from our expectations, please read Part I, Item 1A, Risk Factors.
Further, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future liquidity may be adversely affected. For additional information regarding known material factors that could cause cash flow or access to and cost of finance sources to differ from our expectations, please read Part I, Item 1A, “Risk Factors”.
Further discussion of adjusted operating profit for our funeral home and cemetery segments is presented under “Results of Operations.” YEAR ENDED DECEMBER 31, 2024 COMPARED TO YEAR ENDED DECEMBER 31, 2023 Results of Operations The following is a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Further discussion of adjusted operating profit for our funeral home and cemetery segments is presented under “Results of Operations.” YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024 Results of Operations The following is a discussion of our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
We believe that our existing and anticipated cash resources, including, as needed, additional borrowings or other financings that we may be able to obtain, will be sufficient to meet our anticipated working capital requirements, capital expenditures, scheduled debt payments, commitments and dividends for the next 12 months, as well as our long-term financial obligations.
We believe that our existing and anticipated cash resources, including, as needed, additional borrowings or other financings that we may be able to obtain, will be sufficient to meet our anticipated working capital requirements, capital expenditures, scheduled debt payments, commitments, potential growth acquisitions, and dividends for the next 12 months, as well as our long-term financial obligations.
Although such conditions have not materially impacted our business to date and we expect these trends to continue in 2025, we will continue to assess these impacts and take the appropriate steps, if necessary, to mitigate any changes in consumer preferences or additional cost increases, if possible.
Although such conditions have not materially impacted our business to date and we expect these trends to continue into 2026, we will continue to assess these impacts and take the appropriate steps, if necessary, to mitigate any changes in consumer preferences or additional cost increases, if possible.
Other revenue and other adjusted operating profit, which consist of preneed cemetery trust revenue and preneed cemetery finance charges, increased $0.4 million and $0.5 million, respectively, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Other revenue and other adjusted operating profit, which consist of preneed cemetery trust revenue and preneed cemetery finance charges, increased $0.4 million and $0.4 million, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024.
The term “divested” when discussed in the funeral home segment, refers to six funeral homes we sold and three funeral homes we merged with other businesses we own in existing markets during the year ended December 31, 2024 and two funeral homes we sold and one funeral home we merged with another business we own in an existing market during the year ended December 31, 2023.
The term “divested” when discussed in the funeral home segment, refers to thirteen funeral homes we sold and two funeral homes we merged with other businesses we own in existing markets during the year ended December 31, 2025 and six funeral homes we sold and three funeral home we merged with another business we own in an existing market during the year ended December 31, 2024.
Acquisition and Divestiture Activity During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $10.9 million. Additionally, we sold real property for $1.1 million.
During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $10.9 million. Additionally, we sold real property for $1.1 million.
Cemetery property amortization totaled $8.2 million for the year ended December 31, 2024, an increase of $2.1 million compared to the year ended December 31, 2023, primarily driven by the increase in property sold across our cemetery portfolio. Field depreciation.
Cemetery property amortization totaled $9.4 million for the year ended December 31, 2025, an increase of $1.2 million compared to the year ended December 31, 2024, primarily driven by the increase in property sold across our cemetery portfolio. Field depreciation.
The term “divested” when discussed in the cemetery segment, refers to one cemetery we sold during the year ended December 31, 2024 and two cemeteries we sold during the year ended December 31, 2023. 34 The term “ancillary” in the funeral home segment represents our flower shop, monument business, pet cremation business and online cremation businesses.
The term “divested” when discussed in the cemetery segment, refers to four cemetery we sold during the year ended December 31, 2025 and one cemetery we sold during the year ended December 31, 2024. The term “ancillary” in the funeral home segment represents our flower shop, monument business, pet cremation business and online cremation businesses.
Depreciation expense for our field businesses totaled $13.7 million for the year ended December 31, 2024, a decrease of $0.4 million compared to the year ended December 31, 2023, primarily driven by our business decision in 2023 to lease vehicles rather than purchase them. Regional and unallocated funeral and cemetery costs.
Depreciation expense for our field businesses totaled $13.2 million for the year ended December 31, 2025, a decrease of $0.6 million compared to the year ended December 31, 2024, primarily driven by our business decision to lease vehicles rather than purchase them. Regional and unallocated funeral and cemetery costs.
We determine fair value for each reporting unit using both an income approach, weighted 90%, and a market approach, weighted 10%. Our methodology for determining an income-based fair value is based on discounting projected future cash flows.
We determine fair value for each reporting unit using an income approach, weighted 80%, and two market approaches, weighted 10% each. Our methodology for determining an income-based fair value is based on discounting projected future cash flows.
At December 31, 2024, we operated 162 funeral homes in 26 states and 31 cemeteries in 11 states. Our funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns.
At December 31, 2025, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states. Our funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns.
Cemetery property amortization, field depreciation expense and regional and unallocated funeral and cemetery costs, are not included in adjusted operating profit, a non-GAAP financial measure. Adding back these items will result in gross profit, a GAAP financial measure.
Cemetery property amortization, field depreciation expense, and regional and unallocated funeral and cemetery costs, are not included in adjusted operating profit, a non-GAAP financial measure.
Payments for such agreements are generally not made in advance. These agreements are generally for one to ten years and 32 provide for bi-weekly or monthly payments. We have future payments on our consulting agreements of $2.5 million, with $1.3 million payable within 12 months. Employment agreements - We have employment agreements with our executive officers.
We have future payments on our non-compete agreements of $3.1 million, with $1.2 million payable within 12 months. Consulting agreements - We have various consulting agreements with former owners of businesses we have acquired. Payments for such agreements are generally not made in advance. These agreements are generally for one to ten years and provide for bi-weekly or monthly payments.
See Part II, Item 8, Financial Statements and Supplementary Data, Note 4 for additional information related to goodwill. 38 Business Combinations Determining the fair value of identifiable assets, particularly intangibles and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset.
Business Combinations Determining the fair value of identifiable assets, particularly intangibles and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset.
Cemetery Operations Factors affecting our cemetery operating results include: the size and success of our sales organization; local perceptions and heritage of our cemeteries; our ability to adapt to changes in the economy and consumer confidence; and our response to fluctuations in capital markets and interest rates, which affect investment earnings on trust funds, finance charges on installment contracts and our securities portfolio within the trust funds.
Cemetery Operations Factors affecting our cemetery operating results include: the size and success of our sales organization; local perceptions and heritage of our cemeteries; our ability to adapt to changes in the economy and consumer confidence; controlling salary, merchandise, and other controllable costs; exercising pricing leverage related to our atneed business to increase average price per interment right sold; and our response to fluctuations in capital markets and interest rates, which affect investment earnings on trust funds, finance charges on installment contracts and our securities portfolio within the trust funds.
For the year ended December 31, 2024, we had net payments on our Credit Facility, acquisition debt and finance leases of $43.2 million and paid dividends of $6.8 million. For the year ended December 31, 2023, we had net payments on our Credit Facility, acquisition debt and finance leases of $12.8 million and paid dividends of $6.7 million.
During the year ended December 31, 2024, we had net payments on our Credit Facility, acquisition debt, and finance leases of $43.2 million and paid dividends of $6.8 million. Credit Facility, Lease Obligations, and Acquisition Debt Credit Facility At December 31, 2025, we had outstanding borrowings under the Credit Facility of $126.7 million.
We also received proceeds of $1.4 million from our property insurance policy for the reimbursement of renovation costs for certain of our funeral businesses damaged by Hurricane Ian that occurred during the third quarter of 2022 and a fire that occurred during the first quarter of 2023.
Insurance Proceeds During the year ended December 31, 2024, we received proceeds of $0.4 million from our property insurance policy for the reimbursement of renovation costs for certain of our funeral businesses damaged by Hurricane Ian that occurred during the third quarter of 2022.
The components of Net loss on divestitures, disposals and impairment charges are as follows (in thousands): Years Ended December 31, 2024 2023 Impairment of goodwill, intangibles and PPE $ 637 $ 454 Net loss on divestitures 1,224 106 Net loss on disposals of fixed assets 719 631 Total $ 2,580 $ 1,191 During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate loss of $1.2 million.
The components of Net loss on divestitures and impairment charges are as follows (in thousands): Year ended December 31, 2025 2024 Impairment of goodwill, intangibles, and PPE $ 1,761 $ 637 Net (gain) loss on divestitures (1,451) 1,224 Net loss on disposals of fixed assets 61 719 Total $ 371 $ 2,580 During the year ended December 31, 2025, we sold thirteen funeral homes and four cemeteries for an aggregate gain of $1.5 million.
Interest expense related to its respective debt arrangement is as follows (in thousands): Years Ended December 31, 2024 2023 Senior Notes $ 17,692 $ 17,662 Credit Facility 13,860 17,803 Finance leases 506 500 Acquisition debt 406 291 Other (389) 10 Total $ 32,075 $ 36,266 37 Net gain on property damage, net of insurance claims.
Interest expense related to its respective debt arrangement is as follows (in thousands): Year ended December 31, 2025 2024 Senior Notes $ 17,722 $ 17,692 Credit Facility 9,301 13,860 Finance leases 967 506 Acquisition debt 367 406 Other 8 (389) Total $ 28,365 $ 32,075 Net gain on property damage, net of insurance claims.
Also, after giving effect to the Credit Facility Amendment, executed during the third quarter of 2024, we experienced lower variable interest rates under our Credit Facility, which resulted in lower borrowing costs in the second half of the year compared to the same period in the prior year.
In addition, after giving effect to the Credit Facility Amendment, executed during the third quarter of 2024, we continue to experience lower variable interest rates and lower average debt outstanding under our Credit Facility, which resulted in lower borrowing costs in 2025 compared to the prior year.
Investing Activities Our investing activities resulted in a net cash outflow of $3.6 million f or the year ended December 31, 2024 compared to $57.0 million for the year ended December 31, 2023 and $52.5 million for the year ended December 31, 2022.
Investing Activities Our investing activities resulted in a net cash outflows of $35.2 million f or the year ended December 31, 2025, compared to net cash inflows of $3.6 million for the year ended December 31, 2024, a decrease of $31.5 million.
We also recognized an impairment of $0.6 million as a result of our 2024 qualitative assessment of tradenames and an impairment of $40 thousand related to property, plant and equipment for assets held for sale. During the year ended December 31, 2023, we sold two funeral homes and two cemeteries for a loss of $0.1 million.
We also recognized an impairment of $0.6 million as a result of our 2024 qualitative assessment of tradenames and an impairment of $40 thousand related to property, plant, and equipment for assets held for sale. Interest expense .
We also had one letter of credit for $2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2025, and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At December 31, 2024, we had $110.8 million of availability under the Credit Facility.
We also had one letter of credit for $2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2026 and is expected to automatically renew annually. At December 31, 2025, we had $121.1 million of availability under the Credit Facility. See Note 12 of Part II, Item 8.
These agreements are generally for two to five years and provide for participation in various incentive compensation arrangements. These agreements generally renew automatically on an annual basis after their initial term has expired. We have future payments on our employment agreements of $10.0 million, with $5.5 million payable within 12 months.
We have future payments on our consulting agreements of $2.2 million, with $1.0 million payable within 12 months. 27 Employment agreements - We have employment agreements with our executive officers. These agreements are generally for two to five years and provide for participation in various incentive compensation arrangements.
In simple terms, volume and price are the two variables that affect funeral revenue. The average revenue per contract is influenced by the mix of traditional and cremation services because our average cremation service revenue is approximately one-third of the average revenue earned from a traditional burial service. Funeral homes have a relatively fixed cost structure.
Overall, volume, as funeral services performed, and pricing fluctuations impacting our average revenue per contract are the two variables that primarily affect funeral revenue. The average revenue per contract is influenced by the mix of traditional and cremation services as our average cremation service revenue is approximately one-third of the average revenue earned from a traditional burial service.
Our critical accounting policies are more fully described in Part II, Item 8, Financial Statements and Supplementary Data, Note 1. We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations.
We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations.
This Trend Report is used as a supplemental financial statement by management and investors to compare our current financial performance with our previous results and with the performance of other companies.
This Trend Report is used as a supplemental financial statement by management and investors to compare our current financial performance with our previous results and with the performance of other companies. Additionally, management employs segment gross profit for product pricing evaluation and uses segment adjusted operating profit to assess each segment’s performance by comparing results.
While we are encouraged by the stabilization of inflationary costs that we have experienced throughout 2024, we are unable to forecast with any certainty whether inflationary costs will continue to moderate in future periods, as the ultimate scope and duration of these impacts remain unknown at this time.
While inflationary pressures appear to have moderated and stabilized, we are unable to forecast or predict with any certainty whether inflationary costs will remain stable and continue to moderate in future periods, as the ultimate scope and duration of these impacts could change as a result of the impact of increased tariffs and remain unknown at this time.
Net income in 2023 decreased $8.0 million compared to 2022, primarily due to the following: (1) a $10.4 million increase in interest expense; (2) a $4.7 million increase in general, administrative and other expenses; and (3) a $1.0 million increase in divestitures, disposals, impairment charges and insurance reimbursements, offset by (4) the increase in gross profit of $5.1 million and (4) a $2.8 million decrease in tax expense. 33 Further discussion of general, administrative and other expenses, net loss on divestitures, disposals and impairment charges, interest expense, income taxes and other components of income and expenses are presented under “Other Financial Statement Items.” REPORTING AND NON-GAAP FINANCIAL MEASURES We also present our financial performance in our “Condensed Operating and Financial Trend Report” (“Trend Report”) as reported in our earnings release for the year ending December 31, 2024, dated February 26, 2025, and discussed in the corresponding earnings conference call.
Further discussion of general, administrative and other expenses, net loss on divestitures and impairment charges, interest expense, income taxes and other components of income and expenses are presented under “Other Financial Statement Items.” REPORTING AND NON-GAAP FINANCIAL MEASURES We also present our financial performance in our “Condensed Operating and Financial Trend Report” (“Trend Report”) as reported in our earnings release for the three months ended December 31, 2025, dated February 25, 2026, and discussed in the corresponding earnings conference call.
The following table sets forth the elements of cash flow (in thousands): Years Ended December 31, 2024 2023 2022 Cash and cash equivalents at beginning of year $ 1,523 $ 1,170 $ 1,148 Net cash provided by operating activities 51,996 75,590 61,024 Acquisitions of businesses and real property — (44,500) (33,876) Proceeds from divestitures and sale of other assets 12,057 4,132 5,027 Proceeds from insurance claims 403 1,403 2,440 Capital expenditures (16,098) (18,039) (26,081) Net cash used in investing activities (3,638) (57,004) (52,490) Net (payments) borrowings on our credit facility, acquisition debt and finance lease obligations (43,161) (12,767) 34,418 Payment of debt issuance costs for the credit facility (781) — (922) Net proceeds from employee equity plans 2,033 1,242 1,418 Dividends paid on common stock (6,807) (6,708) (6,763) Purchase of treasury stock — — (36,663) Net cash used in financing activities (48,716) (18,233) (8,512) Cash and cash equivalents at end of year $ 1,165 $ 1,523 $ 1,170 27 Operating Activities For the year ended December 31, 2024, cash provided by operating activities was $52.0 million compared to $75.6 million for the year ended December 31, 2023 and $61.0 million for the year ended December 31, 2022.
As of December 31, 2025, we had borrowings of $126.7 million outstanding on our Credit Facility compared to $137.0 million as of December 31, 2024. 25 The following table sets forth the elements of cash flow (in thousands): Year Ended December 31, 2025 2024 Cash and cash equivalents at beginning of period $ 1,165 $ 1,523 Net cash provided by operating activities 60,693 51,996 Acquisitions of businesses and real property (59,026) — Capital expenditures (20,628) (16,098) Proceeds from divestitures and sale of other assets 44,483 12,057 Proceeds from insurance claims — 403 Net cash used in investing activities (35,171) (3,638) Net payments on our credit facility, acquisition debt, and finance lease obligations (11,416) (43,161) Payment of debt issuance costs for the credit facility — (781) Net payments on employee equity plans (6,558) 2,033 Dividends paid on common stock (7,025) (6,807) Net cash used in financing activities (24,999) (48,716) Cash and cash equivalents at end of period $ 1,688 $ 1,165 Operating Activities For the year ended December 31, 2025, cash provided by operating activities was $60.7 million compared to $52.0 million for the year ended December 31, 2024.
Below is a breakdown of adjusted operating profit (a non-GAAP financial measure) by segment (in thousands): Years Ended December 31, 2024 2023 2022 Funeral Home $ 107,990 $ 104,997 $ 111,471 Cemetery 72,661 56,079 49,890 Adjusted operating profit $ 180,651 $ 161,076 $ 161,361 Adjusted operating profit margin (1) 44.7% 42.1% 43.6% (1) Adjusted operating profit margin is defined as adjusted operating profit as a percentage of revenue.
Below is a breakdown of adjusted operating profit (a non-GAAP financial measure) by segment (in thousands): Year Ended December 31, 2025 2024 Funeral Home $ 112,004 $ 107,990 Cemetery 74,974 72,661 Adjusted operating profit $ 186,978 $ 180,651 Adjusted operating profit margin (1) 44.8% 44.7% (1) Adjusted operating profit margin is defined as adjusted operating profit as a percentage of revenue.
General, administrative and other expenses, which include salaries and benefits and cash and equity incentive compensation for our Houston support office, totaled $59.0 million for the year ended December 31, 2024, an increase of $16.9 million compared to the year ended December 31, 2023, primarily driven by the following: i) a $6.2 million increase in salary and benefits expenses and cash and equity incentive compensation costs, primarily driven by the termination expense of our founder and former Executive Chairman of the Board pursuant to his Transition Agreement and termination expense for our former Chief Financial Officer pursuant to his Separation and Release Agreement; ii) a $4.6 million increase in other professional fees primarily related to the development of our digital transformation project; iii) a $4.0 million increase primarily related to our agreement to pay our financial advisor in connection with the Company's previously concluded review of strategic alternatives; iv) a $0.9 million increase in information technology expenses such as software license and support fees; and v) a $1.2 million increase in various other general and administrative expenses.
General, administrative, and other expenses, which include salaries and benefits and cash and equity incentive compensation for our Houston support office, totaled $48.6 million for the year ended December 31, 2025, a decrease of $10.4 million compared to the year ended December 31, 2024, primarily driven by a $6.2 million decrease in salary and benefits expenses and cash and equity incentive compensation costs, primarily driven by the termination expense of our founder and former Executive Chairman of the Board pursuant to his Transition Agreement and termination expense for our former Chief Financial Officer pursuant to his Separation and Release Agreement recorded in the prior year, and an $6.2 million decrease in other professional fees.
In accordance with the guidance, if the fair value of the reporting unit is less than its carrying amount an impairment charge is recorded in an amount equal to the difference.
In accordance with the guidance, if the fair value of the reporting unit is less than its carrying amount an impairment charge is recorded in an amount equal to the difference. See Part II, Item 8, Financial Statements and Supplementary Data, Note 4 for additional information related to goodwill.
Regional and unallocated funeral and cemetery costs totaled $15.4 million for the year ended December 31, 2024, a decrease of $1.2 million compared to the year ended December 31, 2023, primarily driven by the following: i) an $0.7 million decrease in incentive compensation costs, ii) a $0.7 million decrease in leadership and development expenses, offset by iii) a $0.4 million increase in salaries and benefits expenses.
Regional and unallocated funeral and cemetery costs totaled $17.7 million for the year ended December 31, 2025, a increase of $2.4 million compared to the year ended December 31, 2024, primarily driven by an increase in leadership and development expenses. 31 Other Financial Statement Items General, administrative, and other.
Income tax expense totaled $17.1 million for the year ended December 31, 2024, an increase of $4.1 million compared to the year ended December 31, 2023. Our operating tax rate before discrete items was 32.1% and 28.4% for the years ended December 31, 2024 and 2023, respectively.
Our operating tax rate before discrete items was 31.6% and 32.1% for the year ended December 31, 2025 and 2024, respectively. We recorded a net discrete tax benefit of $3.4 million for the year ended December 31, 2025, a decrease of $4.5 million compared to the year ended December 31, 2024.
Further discussion of the components of gross profit for our funeral home and cemetery segments, is presented under “Results of Operations.” Net income in 2024 decreased $0.5 million compared to 2023, primarily due to a $16.9 million increase in general, administrative and other expenses, primarily comprised of one-time costs related to executive severance payments and the Company’s review of strategic alternatives, a $4.1 million increase in income tax expense and a $1.4 million increase in loss on divestitures, disposals and impairment charges.
Net income in 2025 increased $18.6 million compared to 2024, primarily due to a $10.4 million decrease in general, administrative, and other expenses, as 2024 is comprised of one-time costs related to executive severance payments and the Company’s review of strategic alternatives, a $3.3 million increase in gross profit contribution from our businesses, a $2.2 million decrease in loss on divestitures and impairment charges and a $3.7 million decrease in interest expense, offset by a $1.6 million increase in income tax expense.
The decrease in ancillary revenue is primarily due to a decision to cease the operations of a cremation focused business at our Bakersfield, CA business, which did not contribute materially to adjusted operating profit. 35 Other revenue and other adjusted operating profit, which consists of preneed funeral insurance commissions and earnings from delivered preneed funeral trust and insurance contracts, increased $3.3 million and $2.6 million, respectively, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Other revenue and other adjusted operating profit, which consists of preneed funeral insurance commissions and earnings from delivered preneed funeral trust and insurance contracts, increased $3.8 million and $2.9 million, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024.
See Part II, Item 8, Financial Statements and Supplementary Data, Note 14 to our Consolidated Financial Statements for further detail of our lease payments. Acquisition Debt Acquisition debt consists of deferred purchase price and promissory notes payable to sellers.
See Note 14 of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to lease obligations. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report. Acquisition Debt Acquisition debt consists of deferred purchase price and promissory notes payable to sellers.
These agreements are generally for one to ten years and provide for periodic payments over the term of the agreements. We have future payments on our non-compete agreements of $5.2 million, with $1.9 million payable within 12 months. Consulting agreements - We have various consulting agreements with former owners of businesses we have acquired.
Off-Balance Sheet Arrangements At December 31, 2025, our off-balance sheet arrangements were as follows: Non-compete agreements - We have various non-compete agreements with former owners and employees of businesses we have acquired. These agreements are generally for one to ten years and provide for periodic payments over the term of the agreements.
Cemetery atneed revenue, which represents 31% of our total operating revenue, increased $0.7 million for the year ended December 31, 2024, compared to the same period of the prior year, primarily due to an increase in delivered merchandise and services across our cemetery portfolio.
Cemetery atneed revenue, which represents approximately 29% of our total operating revenue, increased $2.5 million for the year ended December 31, 2025, compared to the same period of the prior year, primarily due to a 17.1% increase in atneed property sold as well as a 3.4% increase in atneed merchandise and service that was delivered within the period.
This includes prioritizing our capital allocation for debt repayments, the payment of dividends and debt obligations, internal growth capital expenditures, and general corporate purposes, as allowed under our Credit Facility. We expect to fund these payments using cash on hand and borrowings under our Credit Facility.
For 2026, our plan is to remain focused on executing our growth strategy and other strategic objectives. This includes prioritizing our capital allocation for potential strategic growth acquisitions, capital expenditures, debt repayments, the payment of dividends, and other general corporate purposes as allowed under our Credit Facility.
We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Trend Report is a non-GAAP statement that also provides insight into underlying trends in our business.
We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
The discounted cash flow valuation uses projections of future cash flows and includes assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows.
The projected future cash flows include assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows discounted at our weighted average cost of capital based on market participant assumptions.
Below is a reconciliation of gross profit (a GAAP financial measure) to adjusted operating profit (a non-GAAP financial measure) (in thousands): Years Ended December 31, 2024 2023 2022 Gross profit $ 143,390 $ 124,295 $ 119,226 Cemetery property amortization 8,168 6,039 5,859 Field depreciation expense 13,729 14,166 13,316 Regional and unallocated funeral and cemetery costs 15,364 16,576 22,960 Adjusted operating profit (1) $ 180,651 $ 161,076 $ 161,361 (1) Adjusted operating profit is defined as gross profit plus cemetery property amortization, field depreciation expense and regional and unallocated funeral and cemetery costs.
The Trend Report is a non-GAAP statement that also provides insight into underlying trends in our business. 28 Below is a reconciliation of gross profit (a GAAP financial measure) to adjusted operating profit (a non-GAAP financial measure) (in thousands): Year Ended December 31, 2025 2024 Gross profit $ 146,676 $ 143,390 Cemetery property amortization 9,388 8,168 Field depreciation expense 13,167 13,729 Regional and unallocated funeral and cemetery costs 17,747 15,364 Adjusted operating profit (1) $ 186,978 $ 180,651 (1) Adjusted operating profit is defined as gross profit plus cemetery property amortization, field depreciation expense, and regional and unallocated funeral and cemetery costs.
Ancillary revenue, which represents revenue from our flower shop, monument business, pet cremation business and online cremation businesses decreased $0.3 million, while ancillary adjusted operating profit increased $0.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Ancillary revenue decreased $0.7 million, while ancillary adjusted operating profit decreased $0.1 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in ancillary revenue is primarily due to a decline in our online cremation business.
During the year ended December 31, 2023, we recorded a $1.4 million gain on the sale of other real estate not used in business operations. We did not record any gain or loss activity during the year ended December 31, 2024. Income taxes.
During the year ended December 31, 2024, we recorded a $0.4 million gain, net of insurance proceeds, for damages from Hurricane Ian, which occurred during the third quarter of 2022. Other, net. During the year ended December 31, 2025, we recorded a $1.0 million gain on the sale of other real property not used in business operations.
However, we continued to successfully implement our enhanced pricing strategy through 2024, which contributed to the increase in average revenue per funeral contract. Funeral home adjusted operating profit for the year ended December 31, 2024 increased $1.3 million when compared to the same period in 2023, reflecting our ongoing focus on cost efficiency and operational improvements.
Funeral home adjusted operating profit for the year ended December 31, 2025, increased $2.9 million when compared to the same period in 2024, reflecting our ongoing focus on cost efficiency and operational improvements. The comparable adjusted operating profit margin decreased 20 basis points to 39.5%, driven by 0.2% increase in operating expenses as a percentage of revenue.
CRITICAL ACCOUNTING ESTIMATES The preparation of our Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Understanding our accounting policies and the extent to which our management uses judgment, assumptions and estimates in applying these policies is integral to understanding our Consolidated Financial Statements.
Understanding our accounting policies and the extent to which our management uses judgment, assumptions and estimates in applying these policies is integral to understanding our Consolidated Financial Statements. Our critical accounting policies are more fully described in Part II, Item 8 “Financial Statements and Supplementary Data” in Note 1.
For the year ended December 31, 2022, we had net borrowings on our Credit Facility, acquisition debt and finance leases of $34.4 million, offset by the following payments: i) $36.7 million for the purchase of treasury stock; ii) $6.8 million in dividends; and iii) $0.9 million for debt issuance and transition costs related to our Credit Facility.
During the year ended December 31, 2025, we had net payments on our Credit Facility, acquisition debt, and finance leases of $11.4 million, net payments on our employee equity plans of $6.6 million, and paid dividends of $7.0 million.
We generate cash in our operations primarily from atneed sales and delivery of preneed sales. We also generate cash from earnings on our cemetery perpetual care trusts. Based on our recent operating results, current cash position and anticipated future cash flows, we do not anticipate any significant liquidity constraints in the foreseeable future.
LIQUIDITY AND CAPITAL RESOURCES Overview Our primary sources of liquidity and capital resources are internally generated cash flows from operating activities and availability under our Credit Facility. We generate cash in our operations primarily from atneed sales and delivery of preneed sales. We also generate cash from earnings on our cemetery perpetual care trusts.
Our unrecognized tax benefit reserve for the years ended December 31, 2024 and 2023 was $3.5 million and $3.4 million, respectively. See Part II, Item 8, Financial Statements and Supplementary Data, Notes 1 and 16 for additional information regarding income taxes.
Our unrecognized tax benefit reserve for the years ended December 31, 2025 and 2024 was $3.6 million and $3.5 million, respectively.
FINANCIAL HIGHLIGHTS Below are our financial highlights (in thousands except for volumes and averages): Years Ended December 31, 2024 2023 2022 Revenue $ 404,198 $ 382,520 $ 370,174 Funeral contracts 44,103 46,355 47,498 Average revenue per funeral contract $ 5,714 $ 5,543 $ 5,493 Preneed interment rights (property) sold 14,523 11,813 10,878 Average price per preneed interment right sold $ 5,374 $ 5,007 $ 4,576 Gross profit $ 143,390 $ 124,295 $ 119,226 Net income $ 32,953 $ 33,413 $ 41,381 Revenue in 2024 increased $21.7 million compared to 2023, primarily as a result of a 22.9% increase in preneed interment rights (property) sold and a 7.3% increase in the average price per preneed interment right sold.
FINANCIAL HIGHLIGHTS Below are our consolidated financial highlights (in thousands except for volumes and averages): Year ended December 31, 2025 2024 Inc/(Dec) % Change Total revenue $ 417,440 $ 404,198 $ 13,242 3.3 % Funeral contracts 43,523 44,103 (580) (1.3) % Average revenue per funeral contract excluding preneed interest $ 5,693 $ 5,549 $ 144 2.6 % Preneed interment rights (property) sold 14,573 14,523 50 0.3 % Average price per preneed interment right sold $ 5,807 $ 5,374 $ 433 8.1 % Gross profit $ 146,676 $ 143,390 $ 3,286 2.3 % Net income $ 51,507 $ 32,953 $ 18,554 56.3 % Revenue in 2025 increased $13.2 million compared to 2024, primarily as a result of a 0.3% increase in preneed interment rights (property) sold and an 8.1% increase in the average price per preneed interment right sold.
Additionally, we experienced a 3.1% increase in the average revenue per funeral contract, which was offset by a 4.9% decrease in funeral contract volume.
Additionally, we experienced a 2.6% increase in the average revenue per funeral contract, which was partially offset by a 1.3% decrease in funeral contract volume. Gross profit in 2025 increased $3.3 million compared to 2024, primarily due to the increases in revenue from both our segments, as well as lower operating expenses.
The decline in operating revenue was primarily driven by a 4.9% decrease in contract volume, which was partially offset by a 3.1% increase in the average revenue per contract excluding preneed interest. The decline in funeral contract volume was primarily influenced by the lingering impact of the COVID-19 related pull forward effect.
The increase in operating revenue was primarily driven by a 1.4% increase in the average revenue per contract excluding preneed interest as well as a 2.3% increase in contract volume. The increase in revenue is driven by our success in implementing our enhanced pricing strategy through 2025, which contributed to the increase in average revenue per funeral contract.
Funeral Home Segment The following table sets forth certain information regarding our revenue and adjusted operating profit for our funeral home operations (in thousands): Years Ended December 31, 2024 2023 Revenue: Operating $ 243,709 $ 244,893 Divested 1,023 4,502 Ancillary 4,322 4,588 Other 14,060 10,793 Total $ 263,114 $ 264,776 Adjusted operating profit Operating $ 95,113 $ 93,766 Divested 41 1,166 Ancillary 673 455 Other 12,163 9,610 Total $ 107,990 $ 104,997 The following consolidated operating measures reflect the significant metrics over this comparative period: Contract volume 44,103 46,355 Average revenue per contract, excluding preneed funeral trust earnings $ 5,549 $ 5,380 Average revenue per contract, including preneed funeral trust earnings $ 5,714 $ 5,543 Cremation rate 60.2% 59.0% Funeral home operating revenue decreased $1.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Adding back these items will result in gross profit, a GAAP financial measure. 29 Funeral Home Segment The following table sets forth certain information regarding our revenue and adjusted operating profit for our funeral home operations (in thousands): Year Ended December 31, 2025 2024 Inc/(Dec) % Change Revenue: Operating $ 239,601 $ 230,954 $ 8,647 3.7 % Divested 8,166 13,778 (5,612) (40.7) % Ancillary 3,608 4,322 (714) (16.5) % Other 17,837 14,060 3,777 26.9 % Total $ 269,212 $ 263,114 $ 6,098 2.3 % Adjusted operating profit Operating $ 94,617 $ 91,752 $ 2,865 3.1 % Divested 1,765 3,402 (1,637) (48.1) % Ancillary 552 673 (121) (18.0) % Other 15,070 12,163 2,907 23.9 % Total $ 112,004 $ 107,990 $ 4,014 3.7 % The following measures reflect significant operating metrics over the comparative period: Contract volume 41,579 40,652 927 2.3 % Average revenue per contract, excluding preneed funeral trust earnings $ 5,763 $ 5,681 $ 82 1.4 % Average revenue per contract, including preneed funeral trust earnings $ 5,924 $ 5,854 $ 70 1.2 % Cremation rate 60.8% 59.9% 0.9% 1.7 % Funeral home operating revenue increased $8.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Capital Expenditures For the year ended December 31, 2024, our capital expenditures (comprised of growth and maintenance spend) totaled $16.1 million compared to $18.0 million for the year ended December 31, 2023, and $26.1 million for the year ended December 31, 2022.
Capital Expenditures For the year ended December 31, 2025, our capital expenditures (comprised of growth and maintenance spend) totaled $20.6 million compared to $16.1 million for the year ended December 31, 2024, an increase of $4.5 million. 26 The following tables present our capital expenditures (in thousands): Year ended December 31, 2025 2024 Growth $ 13,639 $ 8,786 Maintenance 6,989 7,312 Total Capital Expenditures $ 20,628 $ 16,098 Financing Activities Our financing activities resulted in a net cash outflow of $25.0 million for the year ended December 31, 2025, compared to a net cash outflow of $48.7 million for the year ended December 31, 2024, a decrease of $23.7 million.
Cash Flows We began 2024 with $1.5 million in cash and ended the year with $1.2 million in cash. At December 31, 2024, we had borrowings of $137.0 million outstanding on our Credit Facility compared to $179.1 million at December 31, 2023 and $190.7 million at December 31, 2022.
Cash Flows We began 2025 with $1.2 million in cash and ended the year with $1.7 million in cash.
Our effective tax rate was 34.2% and 28.0% for years ended December 31, 2024 and 2023, respectively.
The net discrete tax benefit for the year ended December 31, 2025, is primarily due to vesting of long-term equity compensation, stock option exercises. Our effective tax rate was 26.7% and 34.2% for years ended December 31, 2025 and 2024, respectively.
We have the ability to draw on our Credit Facility, as needed, subject to its customary terms and conditions. For 2025, our plan is to remain focused on executing our strategic objectives and growth strategy.
Based on our recent operating results, current cash position and anticipated future cash flows, we do not anticipate any significant liquidity constraints in the foreseeable future. We have the ability to draw on our Credit Facility, as needed, subject to its customary terms and conditions.
See Part II, Item 8, Financial Statements and Supplementary Data, Note 12 to our Consolidated Financial Statements for further detail of our debt and interest payments. Lease Obligations Our lease obligations consist of operating and finance leases. We lease certain office facilities, certain funeral homes, vehicles and equipment under operating leases with original terms ranging from one to twenty years.
Financial Statements and Supplementary Data for additional information related to our Credit Facility. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report. Lease Obligations Our lease obligations consist of operating and finance leases for certain office facilities and funeral homes as well as vehicles and equipment.
During the year ended December 31, 2022, we acquired a business consisting of two funeral homes in Kissimmee, FL for $6.3 million in cash and a business consisting of three funeral homes, one cemetery and one cremation focused business in the Charlotte, NC area for $25.0 million in cash.
Acquisition and Divestiture Activity During the year ended December 31, 2025, we acquired eight funeral homes, one cemetery, and one cremation focused business in Florida for an aggregate price of $56.5 million. We acquired substantially all of the assets and assumed certain operating liabilities of these businesses.
During the year ended December 31, 2023, we acquired a business consisting of three funeral homes, two cemeteries and one cremation focused business for $44.0 million and real property for $3.1 million of which $0.5 million was paid in cash and the remainder financed over fifteen years.
Additionally, we acquired the real property for one funeral home that we previously leased from a third party for a purchase price of $2.5 million. During the year ended December 31, 2025, we sold thirteen funeral homes and four cemeteries for an aggregate of $40.4 million. Additionally, we sold real property for $4.0 million.
Removed
Inflationary and Macroeconomic Trends During 2024, we continued to experience a stabilization of inflationary costs from our vendors and suppliers for merchandise and goods, particularly as it relates to utilities, funeral supplies and merchandise costs, with costs remaining flat when compared to 2023.
Added
Funeral homes have a relatively large fixed cost structure.
Removed
Further contributing to our lower borrowing costs was the pay down of $42.1 million on our revolving credit facility as we executed our focus to pay down our outstanding debt throughout 2024.
Added
Macroeconomic, Inflationary, and Borrowing Costs During 2025, consumer spending on discretionary items reflected mixed trends.
Removed
Throughout 2024, we continued to experience lower volumes as compared to prior years due to fluctuations in the death rate, although overall financial performance remains at or above prior reporting periods. Although we expect fluctuations in the 26 death rate to continue, we are unable to predict or forecast the duration or variation of the death rate with any certainty.
Added
Based on recent economic indicators, aggregate consumer spending continues to reflect minimal to modest growth, with higher-income consumers appearing more resilient, while many middle and lower-income consumers exhibit more cautious behavior, which could result in an overall reduction in consumer spending and demand for products and services.
Removed
Regardless of these fluctuations in the death rate, we continue to focus on expanding market share, cost management and executing on our strategic operational plans. LIQUIDITY AND CAPITAL RESOURCES Overview Our primary sources of liquidity and capital resources are internally generated cash flows from operating activities and availability under our Credit Facility.
Added
This consumer caution appears to be influenced by factors like elevated inflation, heightened tariff and trade-policy uncertainty, and a more cautious macroeconomic environment. Additionally, beginning in April 2025, the U.S. government announced new and increased tariffs on countries and specific goods, subject to evolving exemptions and additional proposed revisions.
Removed
The decrease of $23.6 million for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to the following non-recurring events, which occurred during 2023: i) an $8.6 million withdrawal of realized capital gains and earnings from our preneed funeral and cemetery trust investments; and ii) the receipt of a $6.0 million incentive payment from a vendor for entering into a strategic partnership agreement to market and sell prearranged funeral services in the future, as well as non-recurring events, which occurred during 2024: i) executive severance payments of $3.5 million and ii) payments of $3.3 million related to the Company’s review of strategic alternatives.
Added
Certain of these tariffs have been stayed or otherwise modified and, since April 2025, the U.S. has continued to announce new or revised tariffs, along with new trade agreements with certain trading partners.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed8 unchanged
Biggest changeWe may redeem the Senior Notes, in whole or in part, at the redemption price of 102.13% on or after May 15, 2024, 101.06% on or after May 15, 2025 and 100% on or after May 15, 2026, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Biggest changeWe may redeem the Senior Notes, in whole or in part, at the redemption price of 100% on or after May 15, 2026, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
We are not exposed to any other significant market risks other than those related to the impact of health and safety concerns from epidemics and pandemics and inflation which are described in more detail in Part 1, Item 1A, Risk Factors in this Form 10-K for the year ended December 31, 2024.
We are not exposed to any other significant market risks other than those related to the impact of health and safety concerns from epidemics and pandemics and inflation which are described in more detail in Part 1, Item 1A, Risk Factors in this Form 10-K for the year ended December 31, 2025.
The following quantitative and qualitative information is provided about financial instruments to which we are a party at December 31, 2024 and from which we may incur future gains or losses from changes in market conditions. We do not enter into derivative or other financial instruments for speculative or trading purposes.
The following quantitative and qualitative information is provided about financial instruments to which we are a party at December 31, 2025 and from which we may incur future gains or losses from changes in market conditions. We do not enter into derivative or other financial instruments for speculative or trading purposes.
Any increase in market interest rates causes the fair value of those liabilities to decrease, but such changes will not affect our interest costs. 40
Any increase in market interest rates causes the fair value of those liabilities to decrease, but such changes will not affect our interest costs. 34
Cost and market values of such investments at December 31, 2024 are presented in Part II, Item 8, Financial Statements and Supplementary Data, Note 8. The sensitivity of the fixed income securities is such that a 0.25% change in interest rates causes an approximate 0.37% change in the value of the fixed income securities.
Cost and market values of such investments at December 31, 2025 are presented in Part II, Item 8, Financial Statements and Supplementary Data, Note 8. The sensitivity of the fixed income securities is such that a 0.25% change in interest rates causes an approximate 0.82% change in the value of the fixed income securities.
At December 31, 2024, the prime rate margin was equivalent to 1.5% and the SOFR rate margin was 2.5%. Assuming the outstanding balance remains unchanged, a change of 100 basis points in our borrowing rate would result in a change in income before taxes of $1.4 million. We have not entered into interest rate hedging arrangements in the past.
At December 31, 2025, the prime rate margin was equivalent to 1.125% and the SOFR rate margin was 2.500%. Assuming the outstanding balance remains unchanged, a change of 100 basis points in our borrowing rate would result in a change in income before taxes of $1.3 million. We have not entered into interest rate hedging arrangements in the past.
We monitor current and forecasted interest rate risk in the ordinary course of business and seek to maintain optimal financial flexibility, quality and solvency. As of December 31, 2024, we had outstanding borrowings under the Credit Facility of $137.0 million.
We monitor current and forecasted interest rate risk in the ordinary course of business and seek to maintain optimal financial flexibility, quality and solvency. As of December 31, 2025, we had outstanding borrowings under the Credit Facility of $126.7 million.
At December 31, 2024, the carrying value 39 of the Senior Notes on our Consolidated Balance Sheets was $396.6 million and the fair value of the Senior Notes was $364.4 million based on the last traded or broker quoted price as reported by Financial Industry Regulatory Authority.
At December 31, 2025, the carrying value of the Senior Notes on our Consolidated Balance Sheets was $397.3 million and the fair value of the Senior Notes was $385.7 million based on the last traded or broker quoted price as reported by Financial Industry Regulatory Authority.

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