|
FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission File Number: 1-11961
|
|
DELAWARE
|
76-0423828
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
3040 Post Oak Boulevard, Suite 300
|
|
Houston, Texas, 77056
|
|
(Address of principal executive offices)
|
|
Large accelerated filer
|
o
|
Accelerated filer
|
x
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
(unaudited)
|
||||
|
December 31, 2012
|
|
June 30, 2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,698
|
|
|
$
|
1,518
|
|
Accounts receivable, net of allowance for bad debts of $1,177 in 2012 and $841 in 2013
|
17,812
|
|
|
16,869
|
|
||
Assets held for sale
|
1,466
|
|
|
20,108
|
|
||
Inventories
|
5,133
|
|
|
4,736
|
|
||
Prepaid expenses
|
5,107
|
|
|
3,518
|
|
||
Other current assets
|
1,923
|
|
|
2,171
|
|
||
Total current assets
|
33,139
|
|
|
48,920
|
|
||
Preneed cemetery trust investments
|
70,960
|
|
|
66,749
|
|
||
Preneed funeral trust investments
|
82,896
|
|
|
93,170
|
|
||
Preneed receivables, net of allowance for bad debts of $2,059 in 2012 and $1,819 in 2013
|
23,222
|
|
|
24,923
|
|
||
Receivables from preneed trusts
|
25,871
|
|
|
13,557
|
|
||
Property, plant and equipment, net of accumulated depreciation of $84,291 in 2012 and $85,151 in 2013
|
152,433
|
|
|
154,415
|
|
||
Cemetery property
|
75,156
|
|
|
73,404
|
|
||
Goodwill
|
218,442
|
|
|
217,244
|
|
||
Deferred charges and other non-current assets
|
9,424
|
|
|
8,243
|
|
||
Cemetery perpetual care trust investments
|
46,542
|
|
|
39,485
|
|
||
Total assets
|
$
|
738,085
|
|
|
$
|
740,110
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of senior long-term debt and capital lease obligations
|
$
|
11,218
|
|
|
$
|
12,139
|
|
Accounts payable
|
5,243
|
|
|
5,064
|
|
||
Other liabilities
|
13,067
|
|
|
15,782
|
|
||
Accrued liabilities
|
12,278
|
|
|
12,199
|
|
||
Liabilities associated with assets held for sale
|
369
|
|
|
20,158
|
|
||
Total current liabilities
|
42,175
|
|
|
65,342
|
|
||
Long-term debt, net of current portion
|
118,841
|
|
|
112,621
|
|
||
Revolving credit facility
|
44,700
|
|
|
34,600
|
|
||
Convertible junior subordinated debentures due in 2029 to an affiliate
|
89,770
|
|
|
89,770
|
|
||
Obligations under capital leases, net of current portion
|
4,013
|
|
|
3,900
|
|
||
Deferred preneed cemetery revenue
|
63,998
|
|
|
56,371
|
|
||
Deferred preneed funeral revenue
|
39,794
|
|
|
32,838
|
|
||
Deferred preneed cemetery receipts held in trust
|
70,960
|
|
|
66,749
|
|
||
Deferred preneed funeral receipts held in trust
|
82,896
|
|
|
93,170
|
|
||
Care trusts’ corpus
|
45,920
|
|
|
39,133
|
|
||
Total liabilities
|
603,067
|
|
|
594,494
|
|
||
Commitments and contingencies:
|
|
|
|
||||
Redeemable preferred stock
|
200
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value; 80,000,000 shares authorized; 22,078,000 and 22,147,000 shares issued at December 31, 2012 and June 30, 2013, respectively
|
221
|
|
|
221
|
|
||
Additional paid-in capital
|
202,462
|
|
|
203,861
|
|
||
Accumulated deficit
|
(52,598
|
)
|
|
(43,199
|
)
|
||
Treasury stock, at cost; 3,922,000 shares at December 31, 2012 and June 30, 2013
|
(15,267
|
)
|
|
(15,267
|
)
|
||
Total stockholders’ equity
|
134,818
|
|
|
145,616
|
|
||
Total liabilities and stockholders’ equity
|
$
|
738,085
|
|
|
$
|
740,110
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Funeral
|
$
|
36,611
|
|
|
$
|
40,779
|
|
|
$
|
76,645
|
|
|
$
|
85,937
|
|
Cemetery
|
12,066
|
|
|
13,375
|
|
|
22,714
|
|
|
25,638
|
|
||||
|
48,677
|
|
|
54,154
|
|
|
99,359
|
|
|
111,575
|
|
||||
Field costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Funeral
|
23,048
|
|
|
24,571
|
|
|
46,007
|
|
|
50,995
|
|
||||
Cemetery
|
7,282
|
|
|
7,637
|
|
|
14,078
|
|
|
14,452
|
|
||||
Depreciation and amortization
|
2,336
|
|
|
2,706
|
|
|
4,480
|
|
|
5,185
|
|
||||
Regional and unallocated funeral and cemetery costs
|
2,080
|
|
|
2,312
|
|
|
4,413
|
|
|
5,073
|
|
||||
|
34,746
|
|
|
37,226
|
|
|
68,978
|
|
|
75,705
|
|
||||
Gross profit
|
13,931
|
|
|
16,928
|
|
|
30,381
|
|
|
35,870
|
|
||||
Corporate costs and expenses:
|
|
|
|
|
|
|
|
||||||||
General and administrative costs and expenses
|
4,852
|
|
|
7,077
|
|
|
10,094
|
|
|
13,355
|
|
||||
Home office depreciation and amortization
|
256
|
|
|
372
|
|
|
511
|
|
|
718
|
|
||||
|
5,108
|
|
|
7,449
|
|
|
10,605
|
|
|
14,073
|
|
||||
Operating income
|
8,823
|
|
|
9,479
|
|
|
19,776
|
|
|
21,797
|
|
||||
Interest expense, net of other income
|
(4,518
|
)
|
|
(3,664
|
)
|
|
(9,070
|
)
|
|
(6,259
|
)
|
||||
Income from continuing operations before income taxes
|
4,305
|
|
|
5,815
|
|
|
10,706
|
|
|
15,538
|
|
||||
Provision for income taxes
|
(1,845
|
)
|
|
(2,210
|
)
|
|
(4,326
|
)
|
|
(6,501
|
)
|
||||
Net income from continuing operations
|
2,460
|
|
|
3,605
|
|
|
6,380
|
|
|
9,037
|
|
||||
Income from discontinued operations, net of tax
|
203
|
|
|
539
|
|
|
742
|
|
|
366
|
|
||||
Net income
|
2,663
|
|
|
4,144
|
|
|
7,122
|
|
|
9,403
|
|
||||
Preferred stock dividend
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
||||
Net income available to common stockholders
|
$
|
2,660
|
|
|
$
|
4,144
|
|
|
$
|
7,115
|
|
|
$
|
9,399
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.35
|
|
|
$
|
0.50
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
|
0.04
|
|
|
0.02
|
|
||||
Basic earnings per common share
|
$
|
0.15
|
|
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.35
|
|
|
$
|
0.46
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
|
0.04
|
|
|
0.02
|
|
||||
Diluted earnings per common share
|
$
|
0.15
|
|
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
$
|
0.025
|
|
|
$
|
0.025
|
|
|
$
|
0.050
|
|
|
$
|
0.050
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
18,077
|
|
|
18,201
|
|
|
18,171
|
|
|
18,170
|
|
||||
Diluted
|
18,153
|
|
|
18,365
|
|
|
18,237
|
|
|
22,743
|
|
|
For the Six Months Ended June 30,
|
||||||
|
2012
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
7,122
|
|
|
$
|
9,403
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gain on sale of assets
|
(428
|
)
|
|
(146
|
)
|
||
Impairment of goodwill
|
—
|
|
|
100
|
|
||
Depreciation and amortization
|
5,050
|
|
|
5,953
|
|
||
Amortization and write-off of deferred financing costs
|
348
|
|
|
(36
|
)
|
||
Provision for losses on accounts receivable
|
1,102
|
|
|
782
|
|
||
Stock-based compensation expense
|
1,182
|
|
|
1,624
|
|
||
Deferred income taxes
|
2,266
|
|
|
1,894
|
|
||
Other
|
38
|
|
|
208
|
|
||
Changes in operating assets and liabilities that provided (required) cash:
|
|
|
|
||||
Accounts and preneed receivables
|
(1,414
|
)
|
|
(2,070
|
)
|
||
Inventories and other current assets
|
740
|
|
|
1,211
|
|
||
Deferred charges and other
|
75
|
|
|
24
|
|
||
Preneed funeral and cemetery trust investments
|
(146
|
)
|
|
(1,363
|
)
|
||
Accounts payable and accrued liabilities
|
(2,552
|
)
|
|
2,285
|
|
||
Deferred preneed funeral and cemetery revenue
|
(177
|
)
|
|
(9,755
|
)
|
||
Deferred preneed funeral and cemetery receipts held in trust
|
168
|
|
|
13,879
|
|
||
Net cash provided by operating activities
|
13,374
|
|
|
23,993
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Acquisitions and new construction
|
(16,729
|
)
|
|
(6,051
|
)
|
||
Capital expenditures
|
(5,651
|
)
|
|
(4,468
|
)
|
||
Net proceeds from the sale of businesses
|
—
|
|
|
2,736
|
|
||
Net cash used in investing activities
|
(22,380
|
)
|
|
(7,783
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Net borrowings from (payments against) the revolving credit facility
|
14,200
|
|
|
(10,100
|
)
|
||
Payments on the term loan
|
—
|
|
|
(5,000
|
)
|
||
Payments on other long-term debt and obligations under capital leases
|
(342
|
)
|
|
(307
|
)
|
||
Proceeds from the exercise of stock options and employee stock purchase plan
|
440
|
|
|
492
|
|
||
Stock option benefit
|
24
|
|
|
—
|
|
||
Dividends on common stock
|
(903
|
)
|
|
(906
|
)
|
||
Dividend on redeemable preferred stock
|
(7
|
)
|
|
(4
|
)
|
||
Payment of loan origination costs
|
—
|
|
|
(565
|
)
|
||
Purchase of treasury stock
|
(4,531
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
8,881
|
|
|
(16,390
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(125
|
)
|
|
(180
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,137
|
|
|
1,698
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,012
|
|
|
$
|
1,518
|
|
1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
RECENTLY ISSUED ACCOUNTING STANDARDS
|
3.
|
ACQUISITIONS
|
•
|
Size of business;
|
•
|
Size of market;
|
•
|
Competitive standing;
|
•
|
Local market demographics;
|
•
|
Strength of brand; and
|
•
|
Barriers to entry.
|
4.
|
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Assets:
|
|
|
|
||||
Current assets
|
$
|
238
|
|
|
$
|
572
|
|
Preneed cemetery trust investments
|
—
|
|
|
7,745
|
|
||
Preneed funeral trust investments
|
—
|
|
|
63
|
|
||
Receivables from preneed trusts
|
293
|
|
|
691
|
|
||
Property, plant and equipment, net
|
504
|
|
|
3,069
|
|
||
Goodwill
|
85
|
|
|
1,097
|
|
||
Deferred charges and other non-current assets
|
346
|
|
|
—
|
|
||
Cemetery perpetual care trust investments
|
—
|
|
|
6,871
|
|
||
Total
|
$
|
1,466
|
|
|
$
|
20,108
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Current liabilities
|
$
|
75
|
|
|
$
|
143
|
|
Long-term debt, net of current portion
|
—
|
|
|
70
|
|
||
Deferred preneed cemetery revenue
|
—
|
|
|
5,059
|
|
||
Deferred preneed funeral revenue
|
294
|
|
|
284
|
|
||
Deferred preneed cemetery receipts held in trust
|
—
|
|
|
7,745
|
|
||
Deferred preneed funeral receipts held in trust
|
—
|
|
|
63
|
|
||
Care trusts corpus
|
—
|
|
|
$
|
6,794
|
|
|
Total
|
$
|
369
|
|
|
$
|
20,158
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Revenues
|
$
|
1,390
|
|
|
$
|
946
|
|
|
$
|
3,001
|
|
|
$
|
2,269
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
353
|
|
|
$
|
239
|
|
|
$
|
819
|
|
|
$
|
543
|
|
Gain (loss) on disposition
|
(2
|
)
|
|
630
|
|
|
426
|
|
|
47
|
|
||||
Provision for income taxes
|
(148
|
)
|
|
(330
|
)
|
|
(503
|
)
|
|
(224
|
)
|
||||
Income from discontinued operations
|
$
|
203
|
|
|
$
|
539
|
|
|
$
|
742
|
|
|
$
|
366
|
|
5.
|
GOODWILL
|
|
|
||
Goodwill as of December 31, 2012
|
$
|
218,442
|
|
Impairment
|
(101
|
)
|
|
Reclassification of assets held for sale
|
(1,097
|
)
|
|
Goodwill as of June 30, 2013
|
$
|
217,244
|
|
6.
|
PRENEED TRUST INVESTMENT
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Preneed cemetery trust investments, at fair value
|
$
|
73,126
|
|
|
$
|
68,784
|
|
Less: allowance for contract cancellation
|
(2,166
|
)
|
|
(2,035
|
)
|
||
Preneed cemetery trust investments, net
|
$
|
70,960
|
|
|
$
|
66,749
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
7,588
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,588
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
2,524
|
|
|
69
|
|
|
(71
|
)
|
|
2,522
|
|
||||
Corporate debt
|
2
|
|
32,730
|
|
|
660
|
|
|
(947
|
)
|
|
32,443
|
|
||||
Preferred stock
|
2
|
|
16,931
|
|
|
283
|
|
|
(33
|
)
|
|
17,181
|
|
||||
Mortgage backed securities
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock
|
1
|
|
8,068
|
|
|
759
|
|
|
(646
|
)
|
|
8,181
|
|
||||
Trust securities
|
|
|
$
|
67,841
|
|
|
$
|
1,771
|
|
|
$
|
(1,697
|
)
|
|
$
|
67,915
|
|
Accrued investment income
|
|
|
$
|
869
|
|
|
|
|
|
|
$
|
869
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
68,784
|
|
||||||
Fair market value as a percentage of cost
|
|
|
|
|
|
|
|
|
100.1
|
%
|
Due in one year or less
|
$
|
—
|
|
Due in one to five years
|
8,400
|
|
|
Due in five to ten years
|
14,087
|
|
|
Thereafter
|
29,659
|
|
|
Total
|
$
|
52,146
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
758
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
758
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
2,008
|
|
|
450
|
|
|
—
|
|
|
2,458
|
|
||||
Corporate debt
|
2
|
|
38,299
|
|
|
863
|
|
|
(507
|
)
|
|
38,655
|
|
||||
Preferred stock
|
2
|
|
22,362
|
|
|
824
|
|
|
(294
|
)
|
|
22,892
|
|
||||
Mortgage backed securities
|
2
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Common stock
|
1
|
|
8,759
|
|
|
34
|
|
|
(1,526
|
)
|
|
7,267
|
|
||||
Trust securities
|
|
|
$
|
72,187
|
|
|
$
|
2,171
|
|
|
$
|
(2,327
|
)
|
|
$
|
72,031
|
|
Accrued investment income
|
|
|
$
|
1,095
|
|
|
|
|
|
|
$
|
1,095
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
73,126
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
99.8
|
%
|
|
June 30, 2013
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign debt
|
$
|
1,762
|
|
|
$
|
(71
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,762
|
|
|
$
|
(71
|
)
|
Corporate debt
|
14,850
|
|
|
(526
|
)
|
|
996
|
|
|
(420
|
)
|
|
15,846
|
|
|
(946
|
)
|
||||||
Preferred stock
|
3,267
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
3,267
|
|
|
(34
|
)
|
||||||
Common stock
|
2,023
|
|
|
(402
|
)
|
|
752
|
|
|
(244
|
)
|
|
2,775
|
|
|
(646
|
)
|
||||||
Total temporary impaired securities
|
$
|
21,902
|
|
|
$
|
(1,033
|
)
|
|
$
|
1,748
|
|
|
$
|
(664
|
)
|
|
$
|
23,650
|
|
|
$
|
(1,697
|
)
|
|
December 31, 2012
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate debt
|
$
|
11,363
|
|
|
$
|
(325
|
)
|
|
$
|
622
|
|
|
$
|
(182
|
)
|
|
$
|
11,985
|
|
|
$
|
(507
|
)
|
Preferred stock
|
1,040
|
|
|
(54
|
)
|
|
2,284
|
|
|
(240
|
)
|
|
3,324
|
|
|
(294
|
)
|
||||||
Common stock
|
5,088
|
|
|
(934
|
)
|
|
957
|
|
|
(592
|
)
|
|
6,045
|
|
|
(1,526
|
)
|
||||||
Total temporary impaired securities
|
$
|
17,491
|
|
|
$
|
(1,313
|
)
|
|
$
|
3,863
|
|
|
$
|
(1,014
|
)
|
|
$
|
21,354
|
|
|
$
|
(2,327
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Investment income
|
$
|
1,290
|
|
|
$
|
1,072
|
|
|
$
|
2,052
|
|
|
$
|
1,765
|
|
Realized gains
|
2,681
|
|
|
1,547
|
|
|
5,054
|
|
|
1,585
|
|
||||
Realized losses
|
(2,195
|
)
|
|
(144
|
)
|
|
(2,309
|
)
|
|
(574
|
)
|
||||
Expenses and taxes
|
(1,894
|
)
|
|
(1,684
|
)
|
|
(2,025
|
)
|
|
(2,065
|
)
|
||||
Increase (decrease) in deferred preneed cemetery receipts held in trust
|
118
|
|
|
(791
|
)
|
|
(2,772
|
)
|
|
(711
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Purchases
|
$
|
(33,060
|
)
|
|
$
|
(11,543
|
)
|
|
$
|
(57,099
|
)
|
|
$
|
(15,705
|
)
|
Sales
|
33,404
|
|
|
13,811
|
|
|
57,492
|
|
|
18,820
|
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Preneed funeral trust investments, at fair value
|
$
|
85,415
|
|
|
$
|
95,972
|
|
Less: allowance for contract cancellation
|
(2,519
|
)
|
|
(2,802
|
)
|
||
Preneed funeral trust investments, net
|
$
|
82,896
|
|
|
$
|
93,170
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
19,257
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,257
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
2,752
|
|
|
61
|
|
|
(33
|
)
|
|
2,780
|
|
||||
U.S. agency obligations
|
1
|
|
559
|
|
|
13
|
|
|
(6
|
)
|
|
566
|
|
||||
Foreign debt
|
2
|
|
1,981
|
|
|
54
|
|
|
(56
|
)
|
|
1,979
|
|
||||
Corporate debt
|
2
|
|
27,405
|
|
|
659
|
|
|
(787
|
)
|
|
27,277
|
|
||||
Preferred stock
|
2
|
|
14,765
|
|
|
452
|
|
|
(59
|
)
|
|
15,158
|
|
||||
Mortgage backed securities
|
2
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Common stock
|
1
|
|
6,989
|
|
|
690
|
|
|
(553
|
)
|
|
7,126
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
11,598
|
|
|
1,610
|
|
|
(25
|
)
|
|
13,183
|
|
||||
Fixed income
|
2
|
|
5,403
|
|
|
19
|
|
|
(145
|
)
|
|
5,277
|
|
||||
Other investments
|
2
|
|
2,688
|
|
|
—
|
|
|
(26
|
)
|
|
2,662
|
|
||||
Trust securities
|
|
|
$
|
93,398
|
|
|
$
|
3,558
|
|
|
$
|
(1,690
|
)
|
|
$
|
95,266
|
|
Accrued investment income
|
|
|
$
|
706
|
|
|
|
|
|
|
$
|
706
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
95,972
|
|
||||||
Fair market value as a percentage of cost
|
|
|
|
|
|
|
|
|
102.0
|
%
|
Due in one year or less
|
$
|
736
|
|
Due in one to five years
|
8,515
|
|
|
Due in five to ten years
|
12,603
|
|
|
Thereafter
|
25,907
|
|
|
Total
|
$
|
47,761
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
13,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,448
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
3,001
|
|
|
75
|
|
|
—
|
|
|
3,076
|
|
||||
U.S agency obligations
|
1
|
|
142
|
|
|
4
|
|
|
—
|
|
|
146
|
|
||||
Foreign debt
|
2
|
|
1,217
|
|
|
273
|
|
|
—
|
|
|
1,490
|
|
||||
Corporate debt
|
2
|
|
25,060
|
|
|
661
|
|
|
(331
|
)
|
|
25,390
|
|
||||
Preferred stock
|
2
|
|
15,228
|
|
|
715
|
|
|
(193
|
)
|
|
15,750
|
|
||||
Common stock
|
1
|
|
5,770
|
|
|
27
|
|
|
(996
|
)
|
|
4,801
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
|
|
11,843
|
|
|
487
|
|
|
(78
|
)
|
|
12,252
|
|
||||
Fixed income
|
1
|
|
6,105
|
|
|
181
|
|
|
(40
|
)
|
|
6,246
|
|
||||
Other investments
|
2
|
|
2,143
|
|
|
—
|
|
|
(15
|
)
|
|
2,128
|
|
||||
Trust securities
|
2
|
|
$
|
83,957
|
|
|
$
|
2,423
|
|
|
$
|
(1,653
|
)
|
|
$
|
84,727
|
|
Accrued investment income
|
|
|
$
|
688
|
|
|
|
|
|
|
$
|
688
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
85,415
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
100.9
|
%
|
|
June 30, 2013
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. debt
|
$
|
838
|
|
|
$
|
(33
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
838
|
|
|
$
|
(33
|
)
|
U.S. agency obligations
|
206
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
206
|
|
|
(6
|
)
|
||||||
Foreign debt
|
1,383
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
1,383
|
|
|
(56
|
)
|
||||||
Corporate debt
|
12,342
|
|
|
(438
|
)
|
|
828
|
|
|
(349
|
)
|
|
13,170
|
|
|
(787
|
)
|
||||||
Preferred stock
|
5,860
|
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
5,860
|
|
|
(59
|
)
|
||||||
Common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
1,732
|
|
|
(344
|
)
|
|
644
|
|
|
(209
|
)
|
|
2,376
|
|
|
(553
|
)
|
||||||
Equity and other
|
33
|
|
|
—
|
|
|
542
|
|
|
(25
|
)
|
|
575
|
|
|
(25
|
)
|
||||||
Fixed income
|
2,691
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
2,691
|
|
|
(145
|
)
|
||||||
Other investments
|
—
|
|
|
—
|
|
|
44
|
|
|
(26
|
)
|
|
44
|
|
|
(26
|
)
|
||||||
Total temporary impaired securities
|
$
|
25,085
|
|
|
$
|
(1,081
|
)
|
|
$
|
2,058
|
|
|
$
|
(609
|
)
|
|
$
|
27,143
|
|
|
$
|
(1,690
|
)
|
|
December 31, 2012
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate debt
|
$
|
7,419
|
|
|
$
|
(212
|
)
|
|
$
|
406
|
|
|
$
|
(119
|
)
|
|
$
|
7,825
|
|
|
$
|
(331
|
)
|
Preferred stock
|
685
|
|
|
(35
|
)
|
|
1,504
|
|
|
(158
|
)
|
|
2,189
|
|
|
(193
|
)
|
||||||
Common stock
|
3,323
|
|
|
(609
|
)
|
|
625
|
|
|
(387
|
)
|
|
3,948
|
|
|
(996
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
1,613
|
|
|
(25
|
)
|
|
632
|
|
|
(53
|
)
|
|
2,245
|
|
|
(78
|
)
|
||||||
Fixed income
|
3,085
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
3,085
|
|
|
(40
|
)
|
||||||
Other investments
|
—
|
|
|
—
|
|
|
30
|
|
|
(15
|
)
|
|
30
|
|
|
(15
|
)
|
||||||
Total temporary impaired securities
|
$
|
16,125
|
|
|
$
|
(921
|
)
|
|
$
|
3,197
|
|
|
$
|
(732
|
)
|
|
$
|
19,322
|
|
|
$
|
(1,653
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Investment income
|
$
|
1,089
|
|
|
$
|
917
|
|
|
$
|
1,951
|
|
|
$
|
1,523
|
|
Realized gains
|
603
|
|
|
1,087
|
|
|
1,338
|
|
|
6,214
|
|
||||
Realized losses
|
(1,727
|
)
|
|
(221
|
)
|
|
(2,177
|
)
|
|
(5,553
|
)
|
||||
Expenses and taxes
|
(793
|
)
|
|
(807
|
)
|
|
(1,003
|
)
|
|
(1,055
|
)
|
||||
Increase (decrease) in deferred preneed funeral receipts held in trust
|
828
|
|
|
(976
|
)
|
|
(109
|
)
|
|
(1,129
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Purchases
|
$
|
(13,721
|
)
|
|
$
|
(7,903
|
)
|
|
$
|
(31,594
|
)
|
|
$
|
(11,089
|
)
|
Sales
|
13,619
|
|
|
10,313
|
|
|
31,793
|
|
|
14,228
|
|
7.
|
PRENEED CEMETERY RECEIVABLES
|
|
June 30, 2013
|
||
Beginning balance
|
$
|
1,903
|
|
Write-offs and cancellations
|
(934
|
)
|
|
Provision
|
438
|
|
|
Assets held for sale reclassification
|
(57
|
)
|
|
Ending balance
|
$
|
1,350
|
|
|
31-60
Past Due
|
|
61-90
Past Due
|
|
91-120
Past Due
|
|
>120
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total Financing
Receivables
|
||||||||||||||
Recognized revenue
|
$
|
506
|
|
|
$
|
315
|
|
|
$
|
165
|
|
|
$
|
789
|
|
|
$
|
1,775
|
|
|
$
|
19,034
|
|
|
$
|
20,809
|
|
Deferred revenue
|
215
|
|
|
121
|
|
|
87
|
|
|
320
|
|
|
743
|
|
|
8,568
|
|
|
9,311
|
|
|||||||
Total contracts
|
$
|
721
|
|
|
$
|
436
|
|
|
$
|
252
|
|
|
$
|
1,109
|
|
|
$
|
2,518
|
|
|
$
|
27,602
|
|
|
$
|
30,120
|
|
8.
|
RECEIVABLES FROM PRENEED TRUSTS
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Preneed trust funds, at cost
|
$
|
26,671
|
|
|
$
|
13,976
|
|
Less: allowance for contract cancellation
|
(800
|
)
|
|
(419
|
)
|
||
Receivables from preneed trusts, net
|
$
|
25,871
|
|
|
$
|
13,557
|
|
9.
|
CONTRACTS SECURED BY INSURANCE
|
10.
|
CEMETERY PERPETUAL CARE TRUST INVESTMENTS
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Trust assets, at fair value
|
$
|
46,542
|
|
|
$
|
39,485
|
|
Pending withdrawals of income
|
(659
|
)
|
|
(464
|
)
|
||
Pending deposits
|
37
|
|
|
112
|
|
||
Care trusts’ corpus
|
$
|
45,920
|
|
|
$
|
39,133
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
4,025
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,025
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
1,451
|
|
|
40
|
|
|
(41
|
)
|
|
1,450
|
|
||||
Corporate debt
|
2
|
|
18,961
|
|
|
391
|
|
|
(549
|
)
|
|
18,803
|
|
||||
Preferred stock
|
2
|
|
9,818
|
|
|
169
|
|
|
(22
|
)
|
|
9,965
|
|
||||
Mortgage backed securities
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock
|
1
|
|
4,672
|
|
|
439
|
|
|
(376
|
)
|
|
4,735
|
|
||||
Trust securities
|
|
|
$
|
38,927
|
|
|
$
|
1,039
|
|
|
$
|
(988
|
)
|
|
$
|
38,978
|
|
Accrued investment income
|
|
|
$
|
507
|
|
|
|
|
|
|
$
|
507
|
|
||||
Cemetery perpetual care trust investments
|
|
|
|
|
|
|
|
|
$
|
39,485
|
|
||||||
Fair market value as a percentage of cost
|
|
|
|
|
|
|
|
|
100.1
|
%
|
Due in one year or less
|
$
|
—
|
|
Due in one to five years
|
4,877
|
|
|
Due in five to ten years
|
8,146
|
|
|
Thereafter
|
17,195
|
|
|
|
$
|
30,218
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market
Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
545
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
545
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
1,267
|
|
|
284
|
|
|
—
|
|
|
1,551
|
|
||||
Corporate debt
|
2
|
|
24,324
|
|
|
556
|
|
|
(323
|
)
|
|
24,557
|
|
||||
Preferred stock
|
2
|
|
14,225
|
|
|
525
|
|
|
(187
|
)
|
|
14,563
|
|
||||
Mortgage backed securities
|
2
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Common stock
|
1
|
|
5,563
|
|
|
22
|
|
|
(969
|
)
|
|
4,616
|
|
||||
Trust securities
|
|
|
$
|
45,925
|
|
|
$
|
1,387
|
|
|
$
|
(1,479
|
)
|
|
$
|
45,833
|
|
Accrued investment income
|
|
|
$
|
709
|
|
|
|
|
|
|
$
|
709
|
|
||||
Cemetery perpetual care investments
|
|
|
|
|
|
|
|
|
$
|
46,542
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
99.8
|
%
|
|
June 30, 2013
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign debt
|
$
|
1,013
|
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,013
|
|
|
$
|
(41
|
)
|
Corporate debt
|
8,616
|
|
|
(306
|
)
|
|
578
|
|
|
(244
|
)
|
|
9,194
|
|
|
(550
|
)
|
||||||
Preferred stock
|
2,097
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
2,097
|
|
|
(21
|
)
|
||||||
Common stock
|
1,177
|
|
|
(234
|
)
|
|
438
|
|
|
(142
|
)
|
|
1,615
|
|
|
(376
|
)
|
||||||
Total temporary impaired securities
|
$
|
12,903
|
|
|
$
|
(602
|
)
|
|
$
|
1,016
|
|
|
$
|
(386
|
)
|
|
$
|
13,919
|
|
|
$
|
(988
|
)
|
|
December 31, 2012
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate debt
|
$
|
7,236
|
|
|
$
|
(207
|
)
|
|
$
|
396
|
|
|
$
|
(116
|
)
|
|
$
|
7,632
|
|
|
$
|
(323
|
)
|
Preferred stock
|
664
|
|
|
(34
|
)
|
|
1,459
|
|
|
(153
|
)
|
|
2,123
|
|
|
(187
|
)
|
||||||
Common stock
|
3,231
|
|
|
(593
|
)
|
|
608
|
|
|
(376
|
)
|
|
3,839
|
|
|
(969
|
)
|
||||||
Total temporary impaired securities
|
$
|
11,131
|
|
|
$
|
(834
|
)
|
|
$
|
2,463
|
|
|
$
|
(645
|
)
|
|
$
|
13,594
|
|
|
$
|
(1,479
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Undistributable realized gains
|
$
|
1,269
|
|
|
$
|
1,063
|
|
|
$
|
2,400
|
|
|
$
|
1,087
|
|
Undistributable realized losses
|
(1,027
|
)
|
|
(103
|
)
|
|
(1,079
|
)
|
|
(398
|
)
|
||||
Decrease in care trusts’ corpus
|
(242
|
)
|
|
(960
|
)
|
|
(1,321
|
)
|
|
(689
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Interest and dividends
|
$
|
1,152
|
|
|
$
|
1,234
|
|
|
$
|
2,303
|
|
|
$
|
2,469
|
|
Realized gains
|
300
|
|
|
600
|
|
|
300
|
|
|
1,161
|
|
||||
Expenses
|
—
|
|
|
(266
|
)
|
|
—
|
|
|
(478
|
)
|
||||
Total
|
$
|
1,452
|
|
|
$
|
1,568
|
|
|
$
|
2,603
|
|
|
$
|
3,152
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Purchases
|
$
|
(21,520
|
)
|
|
$
|
(7,252
|
)
|
|
$
|
(37,737
|
)
|
|
$
|
(9,838
|
)
|
Sales
|
21,644
|
|
|
8,674
|
|
|
38,265
|
|
|
11,795
|
|
11.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 – Fair value of securities based on unadjusted quoted prices for identical assets or liabilities in active markets. Our investments classified as Level 1 securities include cash, common stock, U.S.treasury debt, U.S. agency obligations and equity mutual funds.
|
•
|
Level 2 – Fair value of securities estimated based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation. These inputs include interest rates, yield curves, credit risk, prepayment speeds, rating and tax-exempt status. Our investments classified as Level 2 securities include corporate debt, preferred stocks, foreign debt, mortgage backed securities, certain fixed income securities and fixed income mutual funds.
|
•
|
Level 3 – Unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability. As of
June 30, 2013
, we did not have any assets that had fair values determined by Level 3 inputs and
no
liabilities measured at fair value.
|
12.
|
LONG-TERM DEBT
|
|
December 31, 2012
|
|
June 30, 2013
|
||||
Revolving credit facility, secured, floating rate
|
$
|
44,700
|
|
|
$
|
34,600
|
|
Term loan, secured, floating rate
|
127,500
|
|
|
122,500
|
|
||
Acquisition debt
|
2,427
|
|
|
2,095
|
|
||
Less: current portion
|
(11,086
|
)
|
|
(11,974
|
)
|
||
Total long-term debt
|
$
|
163,541
|
|
|
$
|
147,221
|
|
13.
|
COMMITMENTS AND CONTINGENCIES
|
14.
|
STOCK-BASED COMPENSATION
|
|
|
2013
|
|
Dividend yield
|
|
0.6
|
%
|
Expected volatility
|
|
33.63
|
%
|
Risk-free interest rate
|
|
0.41
|
%
|
Expected life (years)
|
|
3.56
|
|
15.
|
STOCKHOLDERS' EQUITY
|
|
Accumulated Other Comprehensive Income
|
||
Balance at December 31, 2012
|
$
|
—
|
|
Increase in net unrealized gains associated with available-for-sale securities of the trusts
|
1,993
|
|
|
Reclassification of net unrealized gain activity attributable to the
Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus’
|
(1,993
|
)
|
|
Balance at June 30, 2013
|
$
|
—
|
|
16.
|
MAJOR SEGMENTS OF BUSINESS
|
|
Funeral
|
|
Cemetery
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2013
|
$
|
85,937
|
|
|
$
|
25,638
|
|
|
$
|
—
|
|
|
$
|
111,575
|
|
Six months ended June 30, 2012
|
$
|
76,645
|
|
|
$
|
22,714
|
|
|
$
|
—
|
|
|
$
|
99,359
|
|
Income (loss) from continuing operations before income taxes:
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2013
|
$
|
27,243
|
|
|
$
|
7,807
|
|
|
$
|
(19,512
|
)
|
|
$
|
15,538
|
|
Six months ended June 30, 2012
|
$
|
23,863
|
|
|
$
|
5,911
|
|
|
$
|
(19,068
|
)
|
|
$
|
10,706
|
|
Total assets:
|
|
|
|
|
|
|
|
||||||||
June 30, 2013
|
$
|
487,572
|
|
|
$
|
237,608
|
|
|
$
|
14,930
|
|
|
$
|
740,110
|
|
December 31, 2012
|
$
|
481,356
|
|
|
$
|
237,897
|
|
|
$
|
18,832
|
|
|
$
|
738,085
|
|
17.
|
SUPPLEMENTAL DISCLOSURE OF STATEMENT OF OPERATIONS INFORMATION
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Goods
|
|
|
|
|
|
|
|
||||||||
Funeral
|
$
|
14,634
|
|
|
$
|
15,962
|
|
|
$
|
30,386
|
|
|
$
|
33,978
|
|
Cemetery
|
7,698
|
|
|
8,444
|
|
|
14,451
|
|
|
15,591
|
|
||||
Total goods
|
$
|
22,332
|
|
|
$
|
24,406
|
|
|
$
|
44,837
|
|
|
$
|
49,569
|
|
Services
|
|
|
|
|
|
|
|
||||||||
Funeral
|
$
|
20,163
|
|
|
$
|
22,101
|
|
|
$
|
42,321
|
|
|
$
|
47,010
|
|
Cemetery
|
2,280
|
|
|
2,456
|
|
|
4,497
|
|
|
5,068
|
|
||||
Total services
|
$
|
22,443
|
|
|
$
|
24,557
|
|
|
$
|
46,818
|
|
|
$
|
52,078
|
|
Financial revenue
|
|
|
|
|
|
|
|
||||||||
Preneed funeral commission income
|
$
|
450
|
|
|
$
|
481
|
|
|
$
|
901
|
|
|
$
|
989
|
|
Preneed funeral trust earnings
|
1,364
|
|
|
2,235
|
|
|
3,037
|
|
|
3,960
|
|
||||
Cemetery trust earnings
|
1,626
|
|
|
2,087
|
|
|
2,946
|
|
|
4,281
|
|
||||
Cemetery finance charges
|
462
|
|
|
388
|
|
|
820
|
|
|
698
|
|
||||
Total financial revenue
|
$
|
3,902
|
|
|
$
|
5,191
|
|
|
$
|
7,704
|
|
|
$
|
9,928
|
|
Total revenues
|
$
|
48,677
|
|
|
$
|
54,154
|
|
|
$
|
99,359
|
|
|
$
|
111,575
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cost of revenues
|
|
|
|
|
|
|
|
||||||||
Goods
|
|
|
|
|
|
|
|
||||||||
Funeral
|
$
|
12,259
|
|
|
$
|
12,935
|
|
|
$
|
24,454
|
|
|
$
|
27,006
|
|
Cemetery
|
5,782
|
|
|
6,035
|
|
|
11,046
|
|
|
11,156
|
|
||||
Total goods
|
$
|
18,041
|
|
|
$
|
18,970
|
|
|
$
|
35,500
|
|
|
$
|
38,162
|
|
Services
|
|
|
|
|
|
|
|
||||||||
Funeral
|
$
|
10,440
|
|
|
$
|
11,303
|
|
|
$
|
20,853
|
|
|
$
|
23,243
|
|
Cemetery
|
1,500
|
|
|
1,556
|
|
|
3,032
|
|
|
3,201
|
|
||||
Total services
|
$
|
11,940
|
|
|
$
|
12,859
|
|
|
$
|
23,885
|
|
|
$
|
26,444
|
|
Financial expenses
|
|
|
|
|
|
|
|
||||||||
Preneed funeral commissions
|
$
|
349
|
|
|
$
|
333
|
|
|
$
|
700
|
|
|
$
|
746
|
|
Trust administration fees
|
—
|
|
|
46
|
|
|
—
|
|
|
95
|
|
||||
Total financial expenses
|
$
|
349
|
|
|
$
|
379
|
|
|
$
|
700
|
|
|
$
|
841
|
|
Total cost of revenues
|
$
|
30,330
|
|
|
$
|
32,208
|
|
|
$
|
60,085
|
|
|
$
|
65,447
|
|
18.
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
For the Six Months Ended
June 30, |
||||||
|
2012
|
|
2013
|
||||
Cash paid for interest and financing costs
|
$
|
8,968
|
|
|
$
|
6,455
|
|
Cash paid for income taxes
|
818
|
|
|
154
|
|
||
Fair value of stock, stock options and performance awards issued to directors, officers and certain employees
|
2,650
|
|
|
3,350
|
|
||
Restricted common stock withheld for payroll taxes
|
303
|
|
|
1,383
|
|
||
Net deposits from preneed funeral trusts
|
(285
|
)
|
|
(10,337
|
)
|
||
Net deposits from preneed cemetery trusts
|
(856
|
)
|
|
(3,535
|
)
|
||
Net withdrawals from perpetual care trusts
|
874
|
|
|
186
|
|
||
Net increase in preneed receivables
|
(450
|
)
|
|
(2,108
|
)
|
||
Net withdrawals of receivables from preneed trusts
|
121
|
|
|
12,323
|
|
||
Net change in preneed funeral receivables decreasing deferred revenue
|
(279
|
)
|
|
(6,963
|
)
|
||
Net change in preneed cemetery receivables increasing/(decreasing) deferred revenue
|
102
|
|
|
(2,792
|
)
|
||
Net deposits into preneed funeral trust accounts increasing deferred preneed funeral receipts held in trust
|
285
|
|
|
10,337
|
|
||
Net deposits into cemetery trust accounts increasing deferred cemetery receipts held in trust
|
856
|
|
|
3,535
|
|
||
Net deposits (withdrawals) into (from) perpetual care trust accounts decreasing perpetual care trusts’ corpus
|
(973
|
)
|
|
7
|
|
19.
|
EARNINGS PER SHARE
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
|
|
|
|
|
|
||||||||||
Net income
|
$
|
2,663
|
|
|
$
|
4,144
|
|
|
$
|
7,122
|
|
|
$
|
9,403
|
|
Net income allocated to non-vested share awards
|
(85
|
)
|
|
(73
|
)
|
|
(196
|
)
|
|
(170
|
)
|
||||
Preferred stock dividend
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
||||
Undistributed earnings available to common stockholders
|
$
|
2,575
|
|
|
$
|
4,071
|
|
|
$
|
6,919
|
|
|
$
|
9,229
|
|
Income from discontinued operations
|
203
|
|
|
539
|
|
|
742
|
|
|
366
|
|
||||
Undistributed earnings from continuing operations available to common stockholders
|
$
|
2,372
|
|
|
$
|
3,532
|
|
|
$
|
6,177
|
|
|
$
|
8,863
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding for basic EPS computation
|
18,077
|
|
|
18,201
|
|
|
18,171
|
|
|
18,170
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
—
|
|
|||||||
Stock options
|
76
|
|
|
164
|
|
|
66
|
|
|
181
|
|
||||
Convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
—
|
|
|
4,392
|
|
||||
Weighted average number of common and common equivalent shares outstanding for diluted EPS computation
|
18,153
|
|
|
18,365
|
|
|
18,237
|
|
|
22,743
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Undistributed earnings
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.34
|
|
|
$
|
0.49
|
|
Allocation of earnings to non-vested share awards
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
||||
Basic earnings per share from continuing operations
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.35
|
|
|
$
|
0.50
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
|
0.04
|
|
|
0.02
|
|
||||
Basic earnings per common share
|
$
|
0.15
|
|
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Undistributed earnings
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.34
|
|
|
$
|
0.45
|
|
Allocation of earnings to non-vested share awards
|
—
|
|
|
—
|
|
|
0.01
|
|
|
$
|
0.01
|
|
|||
Diluted earnings per share from continuing operations
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
$
|
0.35
|
|
|
$
|
0.46
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
|
0.04
|
|
|
0.02
|
|
||||
Diluted earnings per common share
|
$
|
0.15
|
|
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.48
|
|
|
For the Three Months Ended
June 30, 2013
|
|||||||||
|
Income (Numerator)
|
|
Shares (Denominator)
|
|
Per-Share Amount
|
|||||
Net income
|
$
|
4,144
|
|
|
|
|
|
|
||
Less: Preferred Stock dividends
|
—
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Basic earnings per share
|
|
|
|
|
|
|||||
Net income available to common stockholders
|
4,144
|
|
|
18,201
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|||||
Effect of dilutive securities
|
|
|
|
|
|
|||||
Stock options
|
—
|
|
|
164
|
|
|
|
|||
Convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
|
|||
|
|
|
|
|
|
|||||
Diluted earnings per share
|
|
|
|
|
|
|||||
Net income available to common stockholders and assumed conversions
|
$
|
4,144
|
|
|
18,365
|
|
|
$
|
0.23
|
|
|
For the Six Months Ended
June 30, 2013
|
|||||||||
|
Income (Numerator)
|
|
Shares (Denominator)
|
|
Per-Share Amount
|
|||||
Net income
|
$
|
9,403
|
|
|
|
|
|
|
||
Less: Preferred Stock dividends
|
(4
|
)
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Basic earnings per share
|
|
|
|
|
|
|||||
Net income available to common stockholders
|
9,399
|
|
|
18,170
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|||||
Effect of dilutive securities
|
|
|
|
|
|
|||||
Stock options
|
—
|
|
|
181
|
|
|
|
|||
Convertible junior subordinated debentures
|
1,474
|
|
|
4,392
|
|
|
|
|||
|
|
|
|
|
|
|||||
Diluted earnings per share
|
|
|
|
|
|
|||||
Net income available to common stockholders and assumed conversions
|
$
|
10,873
|
|
|
22,743
|
|
|
$
|
0.48
|
|
20.
|
SUBSEQUENT EVENTS
|
•
|
the execution of our Standards Operating Model;
|
•
|
changes in the number of deaths in our markets;
|
•
|
changes in consumer preferences;
|
•
|
ability to find and retain skilled personnel;
|
•
|
the effects of competition;
|
•
|
the investment performance of our funeral and cemetery trust funds;
|
•
|
fluctuations in interest rates;
|
•
|
our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness;
|
•
|
death benefits related to preneed funeral contracts funded through life insurance contracts;
|
•
|
our ability to generate preneed sales;
|
•
|
the financial condition of third-party insurance companies that fund our preneed funeral contracts;
|
•
|
increased or unanticipated costs, such as insurance or taxes;
|
•
|
effects of the application of applicable laws and regulations, including changes in such regulations or the interpretation thereof;
|
•
|
consolidation of the deathcare industry; and
|
•
|
other factors and uncertainties inherent in the deathcare industry.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Balanced Operating Model –
We believe a decentralized structure works best in the deathcare industry. Successful execution of the Standards Operating Model is highly dependent on strong local leadership, intelligent risk taking, entrepreneurial drive and corporate support aligned with the key drivers of a successful operation organized around three primary areas - market share, people and operating financial metrics.
|
•
|
Incentives Aligned with Standards –
We believe empowering Managing Partners to do the right things in their operations and local communities, and providing appropriate support with operating and financial practices, will enable long-term growth and sustainable profitability. Each Managing Partner participates in a variable bonus plan whereby he or she earns a percentage of his or her respective business' earnings based upon the actual standards achieved as long as the performance exceeds our minimum standards.
|
•
|
The Right Local Leadership
– Successful execution of our operating model is highly dependent on strong local leadership as defined by our 4E Leadership Model, intelligent risk taking and entrepreneurial empowerment. A Managing Partner’s performance is judged according to achievement of the Standards Operating Model for that business.
|
•
|
Size of business;
|
•
|
Size of market;
|
•
|
Competitive standing;
|
•
|
Local market demographics;
|
•
|
Strength of brand; and
|
•
|
Barriers to entry.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(In millions)
|
2012
|
|
2013
|
|
2012
|
|
2013
|
||||||||
Net income from continuing operations, as reported
|
$
|
2.5
|
|
|
$
|
3.6
|
|
|
$
|
6.4
|
|
|
$
|
9.0
|
|
|
|
|
|
|
|
|
|
||||||||
After-tax special items:
|
|
|
|
|
|
|
|
||||||||
Withdrawable trust income
|
—
|
|
|
0.1
|
|
|
0.5
|
|
|
0.5
|
|
||||
Acquisition expenses
|
0.2
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
||||
Severance costs
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
||||
Costs related to credit facility
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Other special items
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
||||
Non-GAAP net income
|
$
|
2.7
|
|
|
$
|
4.6
|
|
|
$
|
7.7
|
|
|
$
|
10.6
|
|
|
Three Months Ended
June 30,
|
|
Change
|
|||||||||||
|
2012
|
|
2013
|
|
Amount
|
|
%
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
28,867
|
|
|
$
|
29,369
|
|
|
$
|
502
|
|
|
1.7
|
%
|
Acquired operating revenue
|
5,930
|
|
|
8,694
|
|
|
2,764
|
|
|
46.6
|
%
|
|||
Preneed funeral insurance commissions
|
450
|
|
|
481
|
|
|
31
|
|
|
6.9
|
%
|
|||
Preneed funeral trust earnings
|
1,364
|
|
|
2,235
|
|
|
871
|
|
|
63.9
|
%
|
|||
Total
|
$
|
36,611
|
|
|
$
|
40,779
|
|
|
$
|
4,168
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
10,322
|
|
|
$
|
11,276
|
|
|
$
|
954
|
|
|
9.2
|
%
|
Acquired operating profit
|
1,776
|
|
|
2,549
|
|
|
773
|
|
|
43.5
|
%
|
|||
Preneed funeral insurance commissions
|
101
|
|
|
162
|
|
|
61
|
|
|
60.4
|
%
|
|||
Preneed funeral trust earnings
|
1,364
|
|
|
2,221
|
|
|
857
|
|
|
62.8
|
%
|
|||
Total
|
$
|
13,563
|
|
|
$
|
16,208
|
|
|
$
|
2,645
|
|
|
19.5
|
%
|
|
Six Months Ended
June 30,
|
|
Change
|
|||||||||||
|
2012
|
|
2013
|
|
Amount
|
|
%
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
60,383
|
|
|
$
|
62,540
|
|
|
$
|
2,157
|
|
|
3.6
|
%
|
Acquired operating revenue
|
12,324
|
|
|
18,448
|
|
|
6,124
|
|
|
49.7
|
%
|
|||
Preneed funeral insurance commissions
|
901
|
|
|
989
|
|
|
88
|
|
|
9.8
|
%
|
|||
Preneed funeral trust earnings
|
3,037
|
|
|
3,960
|
|
|
923
|
|
|
30.4
|
%
|
|||
Total
|
$
|
76,645
|
|
|
$
|
85,937
|
|
|
$
|
9,292
|
|
|
12.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
23,154
|
|
|
$
|
24,825
|
|
|
$
|
1,671
|
|
|
7.2
|
%
|
Acquired operating profit
|
4,246
|
|
|
5,914
|
|
|
1,668
|
|
|
39.3
|
%
|
|||
Preneed funeral insurance commissions
|
201
|
|
|
272
|
|
|
71
|
|
|
35.3
|
%
|
|||
Preneed funeral trust earnings
|
3,037
|
|
|
3,931
|
|
|
894
|
|
|
29.4
|
%
|
|||
Total
|
$
|
30,638
|
|
|
$
|
34,942
|
|
|
$
|
4,304
|
|
|
14.0
|
%
|
|
Three Months Ended
June 30,
|
|
Change
|
|||||||||||
|
2012
|
|
2013
|
|
Amount
|
|
%
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
9,978
|
|
|
$
|
10,826
|
|
|
$
|
848
|
|
|
8.5
|
%
|
Acquired operating revenue
|
—
|
|
|
74
|
|
|
74
|
|
|
n/a
|
|
|||
Cemetery trust earnings
|
1,626
|
|
|
2,087
|
|
|
461
|
|
|
28.4
|
%
|
|||
Preneed cemetery finance charges
|
462
|
|
|
388
|
|
|
(74
|
)
|
|
(16.0
|
)%
|
|||
Total
|
$
|
12,066
|
|
|
$
|
13,375
|
|
|
$
|
1,309
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
2,705
|
|
|
$
|
3,328
|
|
|
$
|
623
|
|
|
23.0
|
%
|
Acquired operating loss
|
(9
|
)
|
|
(19
|
)
|
|
(10
|
)
|
|
n/a
|
|
|||
Cemetery trust earnings
|
1,626
|
|
|
2,041
|
|
|
415
|
|
|
25.5
|
%
|
|||
Preneed cemetery finance charges
|
462
|
|
|
388
|
|
|
(74
|
)
|
|
(16.0
|
)%
|
|||
Total
|
$
|
4,784
|
|
|
$
|
5,738
|
|
|
$
|
954
|
|
|
19.9
|
%
|
|
Six Months Ended
June 30,
|
|
Change
|
|||||||||||
|
2012
|
|
2013
|
|
Amount
|
|
%
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
18,948
|
|
|
$
|
20,516
|
|
|
$
|
1,568
|
|
|
8.3
|
%
|
Acquired operating revenue
|
—
|
|
|
143
|
|
|
143
|
|
|
n/a
|
|
|||
Cemetery trust earnings
|
2,946
|
|
|
4,281
|
|
|
1,335
|
|
|
45.3
|
%
|
|||
Preneed cemetery finance charges
|
820
|
|
|
698
|
|
|
(122
|
)
|
|
(14.9
|
)%
|
|||
Total
|
$
|
22,714
|
|
|
$
|
25,638
|
|
|
$
|
2,924
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
4,879
|
|
|
$
|
6,347
|
|
|
$
|
1,468
|
|
|
30.1
|
%
|
Acquired operating loss
|
(9
|
)
|
|
(45
|
)
|
|
(36
|
)
|
|
n/a
|
|
|||
Cemetery trust earnings
|
2,946
|
|
|
4,186
|
|
|
1,240
|
|
|
42.1
|
%
|
|||
Preneed cemetery finance charges
|
820
|
|
|
698
|
|
|
(122
|
)
|
|
(14.9
|
)%
|
|||
Total
|
$
|
8,636
|
|
|
$
|
11,186
|
|
|
$
|
2,550
|
|
|
29.5
|
%
|
|
Six Months Ended
June 30,
|
||||||
|
2012
|
|
2013
|
||||
Cash at January 1st
|
$
|
1.1
|
|
|
$
|
1.7
|
|
Cash flow from operating activities
|
13.4
|
|
|
24.0
|
|
||
Acquisitions and new construction
|
(16.7
|
)
|
|
(6.0
|
)
|
||
Proceeds from the sale of businesses
|
—
|
|
|
2.7
|
|
||
Borrowings (payments) on our Credit Facility
|
14.2
|
|
|
(15.1
|
)
|
||
Maintenance capital expenditures
|
(2.3
|
)
|
|
(3.0
|
)
|
||
Dividends on common stock
|
(0.9
|
)
|
|
(0.9
|
)
|
||
Repurchase of common stock
|
(4.5
|
)
|
|
—
|
|
||
Growth capital expenditures
|
(3.4
|
)
|
|
(1.5
|
)
|
||
Other financing costs
|
0.1
|
|
|
(0.4
|
)
|
||
Cash at June 30th
|
$
|
1.0
|
|
|
$
|
1.5
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Exhibit No.
|
|
Description
|
|
|
|
*10.1
|
|
Incentive Stock Option Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-term Incentive Plan.
|
|
|
|
*10.2
|
|
Restricted Stock Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-term Incentive Plan.
|
|
|
|
10.3
|
|
Separation and Consulting Agreement and General Release, dated July 31, 2013 and between Carriage Services, Inc. and George J. Klug, Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed July 31, 2013.
|
|
|
|
*31.1
|
|
Certification of Periodic Financial Reports by Melvin C. Payne in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*31.2
|
|
Certification of Periodic Financial Reports by L. William Heiligbrodt in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32
|
|
Certification of Periodic Financial Reports by Melvin C. Payne and L. William Heiligbrodt in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350.
|
**101
|
|
Interactive Data Files.
|
*
|
Filed or furnished herewith, as applicable.
|
**
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability.
|
|
|
CARRIAGE SERVICES, INC.
|
Date:
|
August 8, 2013
|
/s/ L. William Heiligbrodt
|
|
|
L. William Heiligbrodt
|
|
|
Vice Chairman of the Board, Executive
|
|
|
Vice President and Secretary
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
*10.1
|
|
Incentive Stock Option Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-term Incentive Plan
|
|
|
|
*10.2
|
|
Restricted Stock Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-term Incentive Plan
|
|
|
|
10.3
|
|
Separation and Consulting Agreement and General Release, dated July 31, 2013 and between Carriage Services, Inc. and George J. Klug, Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed July 31, 2013.
|
|
|
|
*31.1
|
|
Certification of Periodic Financial Reports by Melvin C. Payne in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*31.2
|
|
Certification of Periodic Financial Reports by L. William Heiligbrodt in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32
|
|
Certification of Periodic Financial Reports by Melvin C. Payne and L. William Heiligbrodt in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350.
|
**101
|
|
Interactive Data Files.
|
*
|
Filed or furnished herewith, as applicable.
|
**
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability.
|
Name of Participant:
|
|
Option Period:
|
Five (5) years
|
Number of Shares:
|
|
Exercise Price Per Share:
|
$
|
Vesting Schedule:
|
Subject to Section 7.5 of the Plan, the Option shall become vested with respect to 33⅓% of the total number of shares subject to the Option on each of the first three anniversaries of the Grant Date.
|
DATED:_____________________, ________.
|
|
|
Name
|
|
|
|
Social Security Number
|
|
|
|
Address
|
|
|
|
City State Zip
|
|
Percentage of Shares on
|
Date
|
Which Restrictions Lapse
|
|
|
|
|
First Anniversary of Grant Date
|
33%
|
Second Anniversary of Grant Date
|
33%
|
Third Anniversary of Grant Date
|
33%
|
1.
|
I have reviewed this report on Form 10-Q of Carriage Services, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles; |
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
August 8, 2013
|
|
/s/ Melvin C. Payne
|
|
|
|
Melvin C. Payne
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Carriage Services, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles; |
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
August 8, 2013
|
|
/s/ L. William Heiligbrodt
|
|
|
|
L. William Heiligbrodt
|
|
|
|
Vice Chairman of the Board, Executive
|
|
|
|
Vice President and Secretary
|
|
|
|
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
August 8, 2013
|
|
/s/ Melvin C. Payne
|
|
|
|
Melvin C. Payne
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ L. William Heiligbrodt
|
|
|
|
L. William Heiligbrodt
|
|
|
|
Vice Chairman of the Board, Executive
|
|
|
|
Vice President and Secretary
|
|
|
|
(Principal Financial Officer)
|