ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended, December 31, 2015
|
|
or
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ______________ to _____________
|
Delaware
|
|
76-0423828
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
3040 Post Oak Blvd., Suite 300, Houston, Texas
|
|
77056
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(Title of each class)
|
|
(Name of each exchange on which registered)
|
Common Stock, $.01 Par Value
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
ý
|
|
|
|
|
|||
Non-Accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller Reporting Company
|
|
¨
|
|
|
Page
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
||
Item 15.
|
||
|
|
|
|
||
|
•
|
the ability to find and retain skilled personnel;
|
•
|
the effects of competition;
|
•
|
the execution of our Standards Operating, 4E leadership and Standard Acquisition Models;
|
•
|
changes in the number of deaths in our markets;
|
•
|
changes in consumer preferences;
|
•
|
our ability to generate preneed sales;
|
•
|
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;
|
•
|
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 1.
|
BUSINESS.
|
•
|
demographic trends in terms of population growth and average age, which impact death rates and number of deaths;
|
•
|
our ability to establish and maintain market share positions supported by strong local heritage and relationships;
|
•
|
our ability to effectively respond to increasing cremation trends by packaging complimentary services and merchandise;
|
•
|
our ability to control salary, merchandise and other controllable costs; and
|
•
|
our ability to exercise pricing leverage related to our at-need business to increase average revenues per contract.
|
•
|
size and success of our sales organization;
|
•
|
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.
|
•
|
honesty, integrity and quality in all that we do;
|
•
|
hard work, pride of accomplishment and shared success through employee ownership;
|
•
|
belief in the power of people through individual initiative and teamwork;
|
•
|
outstanding service and profitability go hand-in-hand; and
|
•
|
growth of the Company is driven by decentralization and partnership.
|
•
|
Standards Operating Model
|
•
|
4E Leadership Model; and
|
•
|
Strategic Acquisition Model.
|
•
|
Balanced Operating Model –
We believe a decentralized structure works best in the deathcare industry. Successful execution of our 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 –
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 for that business.
|
•
|
volume and price trends;
|
•
|
size of business;
|
•
|
size of market;
|
•
|
competitive standing;
|
•
|
demographics;
|
•
|
strength of brand; and
|
•
|
barriers to entry.
|
•
|
demographic trends in terms of population growth and average age, which impact death rates and number of deaths;
|
•
|
establishing and maintaining leading market share positions supported by strong local heritage and relationships;
|
•
|
effectively responding to increasing cremation trends by packaging complementary services and merchandise;
|
•
|
controlling salary, merchandise and other controllable costs; and
|
•
|
increasing average revenues per contract.
|
•
|
size and success of our sales organization;
|
•
|
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.
|
|
2013
|
|
2014
|
|
2015
|
|||
Preneed funeral trust funds
|
13.2
|
%
|
|
7.4
|
%
|
|
-2.2
|
%
|
Preneed cemetery trust funds
|
14.2
|
%
|
|
8.3
|
%
|
|
-3.0
|
%
|
Perpetual care trust funds
|
14.2
|
%
|
|
8.4
|
%
|
|
-3.3
|
%
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS.
|
ITEM 2.
|
PROPERTIES.
|
|
Number of
Funeral Homes
|
|
Number of
Cemeteries
|
||||||||
State
|
Owned
|
|
Leased
(1)
|
|
Owned
|
|
Managed
|
||||
California
|
22
|
|
|
6
|
|
|
4
|
|
|
—
|
|
Connecticut
|
8
|
|
|
2
|
|
|
—
|
|
|
—
|
|
Florida
|
8
|
|
|
8
|
|
|
5
|
|
|
3
|
|
Georgia
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Idaho
|
5
|
|
|
1
|
|
|
3
|
|
|
—
|
|
Illinois
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Kansas
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kentucky
|
9
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Louisiana
|
3
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Maryland
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Massachusetts
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Michigan
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Montana
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Nevada
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
New Jersey
|
4
|
|
|
1
|
|
|
—
|
|
|
—
|
|
New Mexico
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
New York
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
North Carolina
|
4
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Ohio
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Oklahoma
|
6
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Pennsylvania
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Rhode Island
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tennessee
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Texas
|
19
|
|
|
1
|
|
|
7
|
|
|
—
|
|
Virginia
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Washington
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
West Virginia
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Total
|
141
|
|
|
26
|
|
|
28
|
|
|
4
|
|
(1)
|
The leases, with respect to these funeral homes, generally have remaining terms ranging from three months to 11 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.
|
ITEM 3.
|
LEGAL PROCEEDINGS.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES.
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
2015
|
High
|
|
Low
|
||||
First Quarter
|
$
|
25.20
|
|
|
$
|
19.41
|
|
Second Quarter
|
$
|
25.65
|
|
|
$
|
22.98
|
|
Third Quarter
|
$
|
24.57
|
|
|
$
|
20.03
|
|
Fourth Quarter
|
$
|
25.96
|
|
|
$
|
21.01
|
|
|
|
|
|
||||
2014
|
High
|
|
Low
|
||||
First Quarter
|
$
|
22.48
|
|
|
$
|
16.71
|
|
Second Quarter
|
$
|
18.90
|
|
|
$
|
15.25
|
|
Third Quarter
|
$
|
19.16
|
|
|
$
|
15.76
|
|
Fourth Quarter
|
$
|
21.30
|
|
|
$
|
17.18
|
|
Period
|
Total Number of Shares Purchased as part of Publicly Announced Program
(1)
|
|
Average Price Paid Per Share
|
|
Dollar Value of Shares That May Yet Be Purchased Under the Program
|
|||||
|
|
|
|
|
|
|||||
April 1, 2015 - April 30, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
May 1, 2015 - May 31, 2105
|
30,000
|
|
|
$
|
25.18
|
|
|
$
|
24,244,737
|
|
June 1, 2015 - June 30, 2015
|
95,000
|
|
|
$
|
24.49
|
|
|
$
|
21,918,039
|
|
Total for quarter ending June 30, 2015
|
125,000
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
July 1, 2015 - July 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
21,918,039
|
|
August 1, 2015 - August 31, 2015
|
519,007
|
|
|
$
|
23.26
|
|
|
$
|
9,845,975
|
|
September 1, 2015 - September 30, 2015
|
560,978
|
|
|
$
|
21.69
|
|
|
$
|
17,678,463
|
|
Total for quarter ending September 30, 2015
|
1,079,985
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
October 1, 2015 - October 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
17,678,463
|
|
November 1, 2015 - November 30, 2015
|
544,980
|
|
|
$
|
24.17
|
|
|
$
|
4,508,919
|
|
December 1, 2015 - December 31, 2015
|
177,700
|
|
|
$
|
25.37
|
|
|
$
|
960
|
|
Total for quarter ending December 31, 2015
|
722,680
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Total for the year ending December 31, 2015
|
1,927,665
|
|
|
|
|
|
(1)
|
No repurchases were made other than through the publicly announced program.
|
*
|
$100 invested on December 31, 2010 in stock or index, including reinvestment of dividends.
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
|
12/14
|
|
12/15
|
||||||||||||
Carriage Services, Inc.
|
$
|
100.00
|
|
|
$
|
117.00
|
|
|
$
|
251.16
|
|
|
$
|
415.65
|
|
|
$
|
448.32
|
|
|
$
|
517.95
|
|
Russell 3000
|
100.00
|
|
|
101.03
|
|
|
117.62
|
|
|
157.10
|
|
|
176.82
|
|
|
177.65
|
|
||||||
Peer Group
|
100.00
|
|
|
122.69
|
|
|
159.97
|
|
|
217.74
|
|
|
274.47
|
|
|
316.47
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
|
Year ended December 31,
|
||||||||||||||||||
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||||||||
INCOME STATEMENT DATA:
|
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||||||
Funeral
|
$
|
139,911
|
|
|
$
|
150,803
|
|
|
$
|
163,082
|
|
|
$
|
173,735
|
|
|
$
|
185,818
|
|
Cemetery
|
42,402
|
|
|
47,388
|
|
|
49,992
|
|
|
52,389
|
|
|
56,684
|
|
|||||
Total revenues
|
182,313
|
|
|
198,191
|
|
|
213,074
|
|
|
226,124
|
|
|
242,502
|
|
|||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Funeral
|
41,880
|
|
|
47,260
|
|
|
48,874
|
|
|
54,102
|
|
|
59,434
|
|
|||||
Cemetery
|
9,536
|
|
|
13,967
|
|
|
15,411
|
|
|
15,906
|
|
|
18,074
|
|
|||||
Total gross profit
|
51,416
|
|
|
61,227
|
|
|
64,285
|
|
|
70,008
|
|
|
77,508
|
|
|||||
General and administrative expenses
|
23,557
|
|
|
24,960
|
|
|
27,379
|
|
|
30,293
|
|
|
28,860
|
|
|||||
Operating income
|
27,859
|
|
|
36,267
|
|
|
36,906
|
|
|
39,715
|
|
|
48,648
|
|
|||||
Interest expense
|
(18,089
|
)
|
|
(17,088
|
)
|
|
(12,622
|
)
|
|
(10,308
|
)
|
|
(10,559
|
)
|
|||||
Accretion of discount on convertible subordinated notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,452
|
)
|
|
(3,454
|
)
|
|||||
Gain on repurchase of junior subordinated debentures
|
846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt and other costs
|
(201
|
)
|
|
(3,031
|
)
|
|
—
|
|
|
(1,042
|
)
|
|
—
|
|
|||||
Loss on redemption of convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,779
|
)
|
|
—
|
|
|||||
Other, net
|
52
|
|
|
963
|
|
|
81
|
|
|
567
|
|
|
(45
|
)
|
|||||
Income before income taxes
|
10,467
|
|
|
17,111
|
|
|
24,365
|
|
|
22,701
|
|
|
34,590
|
|
|||||
Provision for income taxes, net
|
(4,448
|
)
|
|
(6,794
|
)
|
|
(9,245
|
)
|
|
(7,255
|
)
|
|
(13,737
|
)
|
|||||
Net income from continuing operations
|
6,019
|
|
|
10,317
|
|
|
15,120
|
|
|
15,446
|
|
|
20,853
|
|
|||||
Income from discontinued operations
|
959
|
|
|
1,086
|
|
|
4,176
|
|
|
392
|
|
|
—
|
|
|||||
Preferred stock dividend
|
14
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to common shareholders
|
$
|
6,964
|
|
|
$
|
11,389
|
|
|
$
|
19,292
|
|
|
$
|
15,838
|
|
|
$
|
20,853
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.57
|
|
|
$
|
0.83
|
|
|
$
|
0.84
|
|
|
$
|
1.16
|
|
Discontinued operations
|
0.05
|
|
|
0.06
|
|
|
0.23
|
|
|
0.02
|
|
|
—
|
|
|||||
Basic earnings per share
|
$
|
0.38
|
|
|
$
|
0.63
|
|
|
$
|
1.06
|
|
|
$
|
0.86
|
|
|
$
|
1.16
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.57
|
|
|
$
|
0.82
|
|
|
$
|
0.83
|
|
|
$
|
1.12
|
|
Discontinued operations
|
0.05
|
|
|
0.06
|
|
|
0.18
|
|
|
0.02
|
|
|
—
|
|
|||||
Diluted earnings per share
|
$
|
0.38
|
|
|
$
|
0.63
|
|
|
$
|
1.00
|
|
|
$
|
0.85
|
|
|
$
|
1.12
|
|
Dividends declared per share
|
$
|
0.075
|
|
|
$
|
0.100
|
|
|
$
|
0.100
|
|
|
$
|
0.100
|
|
|
$
|
0.100
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
18,359
|
|
|
18,126
|
|
|
17,826
|
|
|
18,108
|
|
|
17,791
|
|
|||||
Diluted
|
18,397
|
|
|
18,226
|
|
|
22,393
|
|
|
18,257
|
|
|
18,317
|
|
|||||
OPERATING AND FINANCIAL DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Funeral homes at end of period
|
159
|
|
|
167
|
|
|
161
|
|
|
164
|
|
|
167
|
|
|||||
Cemeteries at end of period
|
33
|
|
|
33
|
|
|
32
|
|
|
32
|
|
|
32
|
|
|||||
Funeral services performed
|
26,245
|
|
|
27,864
|
|
|
29,854
|
|
|
31,402
|
|
|
32,627
|
|
|||||
Preneed funeral contracts sold
|
6,980
|
|
|
6,792
|
|
|
8,125
|
|
|
6,940
|
|
|
7,797
|
|
|||||
Backlog of preneed funeral contracts
|
81,030
|
|
|
81,585
|
|
|
80,714
|
|
|
82,842
|
|
|
84,353
|
|
|||||
Backlog of preneed cemetery contracts
|
64,807
|
|
|
64,580
|
|
|
63,453
|
|
|
63,322
|
|
|
63,178
|
|
|||||
Average revenue per funeral contract
|
$
|
5,262
|
|
|
$
|
5,347
|
|
|
$
|
5,365
|
|
|
$
|
5,453
|
|
|
$
|
5,621
|
|
Cremation rate
|
45.3
|
%
|
|
46.2
|
%
|
|
46.9
|
%
|
|
47.3
|
%
|
|
48.9
|
%
|
|||||
Depreciation and amortization
|
$
|
9,450
|
|
|
$
|
9,916
|
|
|
$
|
11,635
|
|
|
$
|
11,923
|
|
|
$
|
13,780
|
|
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
672,777
|
|
|
$
|
738,085
|
|
|
$
|
746,599
|
|
|
$
|
827,528
|
|
|
$
|
837,353
|
|
Working capital
|
(1,097
|
)
|
|
(9,036
|
)
|
|
(11,503
|
)
|
|
3,755
|
|
|
(3,457
|
)
|
|||||
Long-term debt, net of current maturities
|
135,000
|
|
|
163,541
|
|
|
142,542
|
|
|
152,387
|
|
|
196,454
|
|
|||||
Convertible junior subordinated debenture
|
89,770
|
|
|
89,770
|
|
|
89,770
|
|
|
—
|
|
|
—
|
|
|||||
Convertible subordinated notes
|
—
|
|
|
—
|
|
|
—
|
|
|
114,542
|
|
|
117,996
|
|
|||||
Stockholders’ equity
|
126,778
|
|
|
134,818
|
|
|
155,973
|
|
|
179,875
|
|
|
157,594
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2014
|
|
2015
|
|||
Total gross profit
|
30.2
|
%
|
|
31.0
|
%
|
|
32.0
|
%
|
General and administrative expenses
|
12.8
|
%
|
|
13.4
|
%
|
|
11.9
|
%
|
Operating income
|
17.3
|
%
|
|
17.6
|
%
|
|
20.1
|
%
|
Interest expense
|
5.9
|
%
|
|
4.6
|
%
|
|
4.4
|
%
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2014
|
|
2015
|
|||
Funeral homes at beginning of period
|
167
|
|
|
161
|
|
|
164
|
|
Acquisitions
|
2
|
|
|
6
|
|
|
2
|
|
Constructed funeral homes
|
—
|
|
|
—
|
|
|
3
|
|
Divestitures
|
(7
|
)
|
|
(2
|
)
|
|
—
|
|
Mergers and relocation of funeral homes
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
Funeral homes at end of period
|
161
|
|
|
164
|
|
|
167
|
|
|
|
|
|
|
|
|||
Cemeteries at beginning of period
|
33
|
|
|
32
|
|
|
32
|
|
Acquisitions
|
—
|
|
|
1
|
|
|
—
|
|
Divestitures
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
Cemeteries at end of period
|
32
|
|
|
32
|
|
|
32
|
|
|
Year Ended December 31,
|
||||||
(In millions)
|
2014
|
|
2015
|
||||
Net income from continuing operations, as reported
|
$
|
15.4
|
|
|
$
|
20.8
|
|
After-tax Special Items, except for
**
|
|
|
|
||||
Withdrawable trust income
|
1.2
|
|
|
0.4
|
|
||
Acquisition and divestiture expenses
|
0.7
|
|
|
0.4
|
|
||
Severance costs
|
0.7
|
|
|
0.6
|
|
||
Consulting fees
|
0.3
|
|
|
1.3
|
|
||
Other incentive compensation
|
0.7
|
|
|
—
|
|
||
Accretion of discount on convertible subordinated notes
**
|
2.5
|
|
|
3.5
|
|
||
Costs related to the credit facility
|
0.7
|
|
|
—
|
|
||
Loss on redemption of convertible junior subordinated debentures
|
2.5
|
|
|
—
|
|
||
Net gain on asset purchase
|
(0.4
|
)
|
|
—
|
|
||
Other special items
|
0.5
|
|
|
0.2
|
|
||
Tax adjustment from prior period
**
|
—
|
|
|
0.1
|
|
||
Adjusted net income
|
$
|
24.8
|
|
|
$
|
27.3
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
127,487
|
|
|
$
|
131,740
|
|
|
$
|
4,253
|
|
|
3.3
|
%
|
Acquired operating revenue
|
36,765
|
|
|
44,628
|
|
|
7,863
|
|
|
21.4
|
%
|
|||
Preneed funeral insurance commissions
|
2,036
|
|
|
1,484
|
|
|
(552
|
)
|
|
(27.1
|
)%
|
|||
Preneed funeral trust earnings
|
7,447
|
|
|
7,966
|
|
|
519
|
|
|
7.0
|
%
|
|||
Revenues from continuing operations
|
$
|
173,735
|
|
|
$
|
185,818
|
|
|
$
|
12,083
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
46,707
|
|
|
$
|
50,563
|
|
|
$
|
3,856
|
|
|
8.3
|
%
|
Acquired operating profit
|
13,767
|
|
|
17,750
|
|
|
3,983
|
|
|
28.9
|
%
|
|||
Preneed funeral insurance commissions
|
958
|
|
|
454
|
|
|
(504
|
)
|
|
(52.6
|
)%
|
|||
Preneed funeral trust earnings
|
7,390
|
|
|
7,885
|
|
|
495
|
|
|
6.7
|
%
|
|||
Gross profit from continuing operations
|
$
|
68,822
|
|
|
$
|
76,652
|
|
|
$
|
7,830
|
|
|
11.4
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
41,257
|
|
|
$
|
43,336
|
|
|
$
|
2,079
|
|
|
5.0
|
%
|
Acquired operating revenue
|
1,599
|
|
|
3,321
|
|
|
1,722
|
|
|
107.7
|
%
|
|||
Cemetery trust earnings
|
8,123
|
|
|
8,440
|
|
|
317
|
|
|
3.9
|
%
|
|||
Preneed cemetery finance charges
|
1,410
|
|
|
1,587
|
|
|
177
|
|
|
12.6
|
%
|
|||
Revenues from continuing operations
|
$
|
52,389
|
|
|
$
|
56,684
|
|
|
$
|
4,295
|
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating Profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
11,845
|
|
|
$
|
14,045
|
|
|
$
|
2,200
|
|
|
18.6
|
%
|
Acquired operating profit
|
351
|
|
|
1,088
|
|
|
737
|
|
|
210.0
|
%
|
|||
Cemetery trust earnings
|
7,931
|
|
|
8,167
|
|
|
236
|
|
|
3.0
|
%
|
|||
Preneed cemetery finance charges
|
1,410
|
|
|
1,587
|
|
|
177
|
|
|
12.6
|
%
|
|||
Gross profit from continuing operations
|
$
|
21,537
|
|
|
$
|
24,887
|
|
|
$
|
3,350
|
|
|
15.6
|
%
|
|
Year Ended December 31,
|
||||||
(In millions)
|
2013
|
|
2014
|
||||
Net income from continuing operations, as reported
|
$
|
15.1
|
|
|
$
|
15.4
|
|
After-tax Special Items, except for **
|
|
|
|
||||
Withdrawable trust income
|
1.0
|
|
|
1.2
|
|
||
Acquisition and divestiture expenses
|
0.5
|
|
|
0.7
|
|
||
Severance costs
|
1.0
|
|
|
0.7
|
|
||
Consulting fees
|
0.4
|
|
|
0.3
|
|
||
Other incentive compensation
|
—
|
|
|
0.7
|
|
||
Securities transaction expenses
|
0.2
|
|
|
—
|
|
||
Accretion of discount on convertible subordinated notes**
|
—
|
|
|
2.5
|
|
||
Costs related to the Credit Facility
|
0.2
|
|
|
0.7
|
|
||
Loss on redemption of convertible junior subordinated debentures
|
—
|
|
|
2.5
|
|
||
Net gain on asset purchase
|
—
|
|
|
(0.4
|
)
|
||
Other special items
|
(0.6
|
)
|
|
0.5
|
|
||
Tax adjustment from prior period**
|
0.3
|
|
|
—
|
|
||
Adjusted net income
|
$
|
18.1
|
|
|
$
|
24.8
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2013
|
|
2014
|
|
Amount
|
|
Percent
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
120,191
|
|
|
$
|
119,322
|
|
|
$
|
(869
|
)
|
|
(0.7
|
)%
|
Acquired operating revenue
|
33,660
|
|
|
44,930
|
|
|
11,270
|
|
|
33.5
|
%
|
|||
Preneed funeral insurance commissions
|
1,853
|
|
|
2,036
|
|
|
183
|
|
|
9.9
|
%
|
|||
Preneed funeral trust earnings
|
7,378
|
|
|
7,447
|
|
|
69
|
|
|
0.9
|
%
|
|||
Revenues from continuing operations
|
$
|
163,082
|
|
|
$
|
173,735
|
|
|
$
|
10,653
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
44,973
|
|
|
$
|
44,756
|
|
|
$
|
(217
|
)
|
|
(0.5
|
)%
|
Acquired operating profit
|
10,486
|
|
|
15,718
|
|
|
5,232
|
|
|
49.9
|
%
|
|||
Preneed funeral insurance commissions
|
640
|
|
|
958
|
|
|
318
|
|
|
49.7
|
%
|
|||
Preneed funeral trust earnings
|
7,326
|
|
|
7,390
|
|
|
64
|
|
|
0.9
|
%
|
|||
Operating profit from continuing operations
|
$
|
63,425
|
|
|
$
|
68,822
|
|
|
$
|
5,397
|
|
|
8.5
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2013
|
|
2014
|
|
Amount
|
|
Percent
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Same store operating revenue
|
$
|
40,181
|
|
|
$
|
41,257
|
|
|
$
|
1,076
|
|
|
2.7
|
%
|
Acquired operating revenue
|
298
|
|
|
1,599
|
|
|
1,301
|
|
|
436.6
|
%
|
|||
Cemetery trust earnings
|
8,095
|
|
|
8,123
|
|
|
28
|
|
|
0.3
|
%
|
|||
Preneed cemetery finance charges
|
1,418
|
|
|
1,410
|
|
|
(8
|
)
|
|
(0.6
|
)%
|
|||
Revenues from continuing operations
|
$
|
49,992
|
|
|
$
|
52,389
|
|
|
$
|
2,397
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating Profit:
|
|
|
|
|
|
|
|
|||||||
Same store operating profit
|
$
|
11,757
|
|
|
$
|
11,845
|
|
|
$
|
88
|
|
|
0.7
|
%
|
Acquired operating profit
|
(43
|
)
|
|
351
|
|
|
394
|
|
|
(916.3
|
)%
|
|||
Cemetery trust earnings
|
7,920
|
|
|
7,931
|
|
|
11
|
|
|
0.1
|
%
|
|||
Preneed cemetery finance charges
|
1,418
|
|
|
1,410
|
|
|
(8
|
)
|
|
(0.6
|
)%
|
|||
Operating profit from continuing operations
|
$
|
21,052
|
|
|
$
|
21,537
|
|
|
$
|
485
|
|
|
2.3
|
%
|
|
2014
|
|
2015
|
||||
Cash at beginning of year
|
$
|
1.4
|
|
|
$
|
0.4
|
|
Cash flow from operating activities
|
36.6
|
|
|
49.9
|
|
||
Acquisitions and land for new construction
|
(57.9
|
)
|
|
(9.7
|
)
|
||
Purchase of land and buildings previously leased
|
(7.6
|
)
|
|
(6.1
|
)
|
||
Net proceeds from the sale of business and other assets
|
2.2
|
|
|
0.1
|
|
||
Growth capital expenditures
|
(8.9
|
)
|
|
(20.0
|
)
|
||
Maintenance capital expenditures
|
(7.2
|
)
|
|
(9.7
|
)
|
||
Net borrowings on our revolving credit facility, term loan and long-term debt obligations
|
6.1
|
|
|
41.7
|
|
||
Proceeds from issuance of convertible subordinated notes
|
143.7
|
|
|
—
|
|
||
Payment of debt issuance costs related to the convertible subordinated notes
|
(4.7
|
)
|
|
—
|
|
||
Redemption of convertible junior subordinated debentures
|
(89.7
|
)
|
|
—
|
|
||
Payments for performance- based stock awards
|
(16.2
|
)
|
|
—
|
|
||
Repurchase of Treasury Stock
|
—
|
|
|
(45.0
|
)
|
||
Dividends on common stock
|
(1.8
|
)
|
|
(1.8
|
)
|
||
Excess tax benefit of equity compensation
|
4.0
|
|
|
0.1
|
|
||
Payment of loan origination costs related to the Credit Facility
|
(0.8
|
)
|
|
—
|
|
||
Other investing and financing activities, net
|
1.2
|
|
|
0.6
|
|
||
Cash at end of year
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
|
|
Payments Due By Period
(in millions) |
||||||||||||||||||||||||||
|
Financial Note
Reference
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
After
5 Years
|
||||||||||||||
Long-term debt obligations
|
13
|
|
$
|
208.5
|
|
|
$
|
12.0
|
|
|
$
|
13.5
|
|
|
$
|
15.2
|
|
|
$
|
167.2
|
|
|
$
|
0.4
|
|
|
$
|
0.2
|
|
Interest obligation on long-term debt
(a)
|
|
|
18.7
|
|
|
6.2
|
|
|
5.8
|
|
|
5.4
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|||||||
Capital lease obligations, including interest
|
16
|
|
5.4
|
|
|
0.5
|
|
|
0.5
|
|
|
0.4
|
|
|
0.4
|
|
|
0.3
|
|
|
3.3
|
|
|||||||
Convertible subordinated notes
(b)
|
14
|
|
143.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143.8
|
|
|||||||
Interest on convertible subordinated notes
|
14
|
|
20.6
|
|
|
3.9
|
|
|
3.9
|
|
|
3.9
|
|
|
3.9
|
|
|
4.0
|
|
|
1.0
|
|
|||||||
Operating lease obligations
|
16
|
|
18.7
|
|
|
4.8
|
|
|
4.1
|
|
|
3.2
|
|
|
2.9
|
|
|
2.0
|
|
|
1.7
|
|
|||||||
Total contractual obligations
|
|
|
$
|
415.7
|
|
|
$
|
27.4
|
|
|
$
|
27.8
|
|
|
$
|
28.1
|
|
|
$
|
175.7
|
|
|
$
|
6.7
|
|
|
$
|
150.0
|
|
(a)
|
Based on interest rates in effect at December 31, 2015.
|
(b)
|
Matures in 2021.
|
|
|
|
Payments Due By Period
(in millions) |
||||||||||||||||||||||||||
|
Financial Note
Reference
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
After
5 Years
|
||||||||||||||
Non-compete agreements
|
16
|
|
$
|
5.6
|
|
|
$
|
1.6
|
|
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
$
|
0.8
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
Consulting agreements
|
16
|
|
4.3
|
|
|
1.4
|
|
|
1.3
|
|
|
0.7
|
|
|
0.4
|
|
|
0.3
|
|
|
0.2
|
|
|||||||
Employment agreements
|
16
|
|
3.5
|
|
|
2.1
|
|
|
1.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual cash obligations
|
|
|
$
|
13.4
|
|
|
$
|
5.1
|
|
|
$
|
3.8
|
|
|
$
|
1.9
|
|
|
$
|
1.2
|
|
|
$
|
0.8
|
|
|
$
|
0.6
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
|
Page
|
CONSOLIDATED FINANCIAL STATEMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2014
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
413
|
|
|
$
|
535
|
|
Accounts receivable, net of allowance for bad debts of $1,127 in 2014 and $1,054 in 2015
|
19,264
|
|
|
18,181
|
|
||
Inventories
|
5,294
|
|
|
5,654
|
|
||
Prepaid expenses
|
4,590
|
|
|
4,684
|
|
||
Other current assets
|
7,144
|
|
|
4,707
|
|
||
Total current assets
|
36,705
|
|
|
33,761
|
|
||
Preneed cemetery trust investments
|
71,972
|
|
|
63,291
|
|
||
Preneed funeral trust investments
|
97,607
|
|
|
85,553
|
|
||
Preneed receivables, net of allowance for bad debts of $2,339 in 2014 and $2,042 in 2015
|
26,284
|
|
|
27,998
|
|
||
Receivables from preneed trusts, net of allowance for contract cancellations of $396 in 2014 and $419 in 2015
|
12,809
|
|
|
13,544
|
|
||
Property, plant and equipment, net of accumulated depreciation of $95,249 in 2014 and $103,306 in 2015
|
186,211
|
|
|
214,874
|
|
||
Cemetery property, net of accumulated amortization of $26,875 in 2014 and $30,289 in 2015
|
75,564
|
|
|
75,597
|
|
||
Goodwill
|
257,442
|
|
|
264,416
|
|
||
Deferred charges and other non-current assets
|
14,264
|
|
|
15,192
|
|
||
Cemetery perpetual care trust investments
|
48,670
|
|
|
43,127
|
|
||
Total assets
|
$
|
827,528
|
|
|
$
|
837,353
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt and capital lease obligations
|
$
|
9,838
|
|
|
$
|
12,236
|
|
Accounts payable
|
6,472
|
|
|
7,917
|
|
||
Other liabilities
|
1,437
|
|
|
524
|
|
||
Accrued liabilities
|
15,203
|
|
|
16,541
|
|
||
Total current liabilities
|
32,950
|
|
|
37,218
|
|
||
Long-term debt, net of current portion
|
111,887
|
|
|
103,854
|
|
||
Revolving credit facility
|
40,500
|
|
|
92,600
|
|
||
Convertible subordinated notes due 2021
|
114,542
|
|
|
117,996
|
|
||
Obligations under capital leases, net of current portion
|
3,098
|
|
|
2,875
|
|
||
Deferred preneed cemetery revenue
|
56,875
|
|
|
56,721
|
|
||
Deferred preneed funeral revenue
|
31,265
|
|
|
31,748
|
|
||
Deferred tax liability
|
36,414
|
|
|
39,956
|
|
||
Other long-term liabilities
|
2,401
|
|
|
5,531
|
|
||
Deferred preneed cemetery receipts held in trust
|
71,972
|
|
|
63,291
|
|
||
Deferred preneed funeral receipts held in trust
|
97,607
|
|
|
85,553
|
|
||
Care trusts’ corpus
|
48,142
|
|
|
42,416
|
|
||
Total liabilities
|
647,653
|
|
|
679,759
|
|
||
Commitments and contingencies:
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value; 80,000,000 shares authorized; 22,434,609 and 22,497,873 issued as of December 31, 2014 and 2015, respectively
|
224
|
|
|
225
|
|
||
Additional paid-in capital
|
212,386
|
|
|
214,250
|
|
||
Retained earnings (deficit)
|
(17,468
|
)
|
|
3,385
|
|
||
Treasury stock, at cost; 3,921,651 shares at December 31, 2014 and 5,849,316 shares at December 31, 2015
|
(15,267
|
)
|
|
(60,266
|
)
|
||
Total stockholders’ equity
|
179,875
|
|
|
157,594
|
|
||
Total liabilities and stockholders’ equity
|
$
|
827,528
|
|
|
$
|
837,353
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Funeral
|
$
|
163,082
|
|
|
$
|
173,735
|
|
|
$
|
185,818
|
|
Cemetery
|
49,992
|
|
|
52,389
|
|
|
56,684
|
|
|||
|
213,074
|
|
|
226,124
|
|
|
242,502
|
|
|||
Field costs and expenses:
|
|
|
|
|
|
||||||
Funeral
|
99,657
|
|
|
104,913
|
|
|
109,166
|
|
|||
Cemetery
|
28,940
|
|
|
30,852
|
|
|
31,797
|
|
|||
Depreciation and amortization
|
10,179
|
|
|
10,545
|
|
|
12,034
|
|
|||
Regional and unallocated funeral and cemetery costs
|
10,013
|
|
|
9,806
|
|
|
11,997
|
|
|||
|
148,789
|
|
|
156,116
|
|
|
164,994
|
|
|||
Gross profit
|
64,285
|
|
|
70,008
|
|
|
77,508
|
|
|||
Corporate costs and expenses:
|
|
|
|
|
|
||||||
General, administrative and other
|
25,923
|
|
|
28,915
|
|
|
27,114
|
|
|||
Home office depreciation and amortization
|
1,456
|
|
|
1,378
|
|
|
1,746
|
|
|||
|
27,379
|
|
|
30,293
|
|
|
28,860
|
|
|||
Operating income
|
36,906
|
|
|
39,715
|
|
|
48,648
|
|
|||
Interest expense
|
(12,622
|
)
|
|
(10,308
|
)
|
|
(10,559
|
)
|
|||
Accretion of discount on convertible subordinated notes
|
—
|
|
|
(2,452
|
)
|
|
(3,454
|
)
|
|||
Loss on early extinguishment of debt and other costs
|
—
|
|
|
(1,042
|
)
|
|
—
|
|
|||
Loss on redemption of convertible junior subordinated debentures
|
—
|
|
|
(3,779
|
)
|
|
—
|
|
|||
Other, net
|
81
|
|
|
567
|
|
|
(45
|
)
|
|||
Total interest and other, net
|
(12,541
|
)
|
|
(17,014
|
)
|
|
(14,058
|
)
|
|||
Income from continuing operations before income taxes
|
24,365
|
|
|
22,701
|
|
|
34,590
|
|
|||
Provision for income taxes
|
(9,245
|
)
|
|
(8,995
|
)
|
|
(13,737
|
)
|
|||
Income tax benefit related to uncertain tax positions
|
—
|
|
|
1,740
|
|
|
—
|
|
|||
Net provision for income taxes
|
(9,245
|
)
|
|
(7,255
|
)
|
|
(13,737
|
)
|
|||
Net income from continuing operations
|
15,120
|
|
|
15,446
|
|
|
20,853
|
|
|||
Income from discontinued operations, net of tax
|
4,176
|
|
|
392
|
|
|
—
|
|
|||
Net income
|
19,296
|
|
|
15,838
|
|
|
20,853
|
|
|||
Preferred stock dividend
|
4
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common stockholders
|
$
|
19,292
|
|
|
$
|
15,838
|
|
|
$
|
20,853
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.83
|
|
|
$
|
0.84
|
|
|
$
|
1.16
|
|
Discontinued operations
|
0.23
|
|
|
0.02
|
|
|
—
|
|
|||
Basic earnings per common share
|
$
|
1.06
|
|
|
$
|
0.86
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.82
|
|
|
$
|
0.83
|
|
|
$
|
1.12
|
|
Discontinued operations
|
0.18
|
|
|
0.02
|
|
|
—
|
|
|||
Diluted earnings per common share
|
$
|
1.00
|
|
|
$
|
0.85
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
17,826
|
|
|
18,108
|
|
|
17,791
|
|
|||
Diluted
|
22,393
|
|
|
18,257
|
|
|
18,313
|
|
|
Shares
Outstanding
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings (Deficit)
|
|
Treasury
Stock
|
|
Total
|
|||||||||||
Balance – December 31, 2012
|
18,156
|
|
|
$
|
221
|
|
|
$
|
202,462
|
|
|
$
|
(52,598
|
)
|
|
$
|
(15,267
|
)
|
|
$
|
134,818
|
|
Net Income – 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
19,292
|
|
|
—
|
|
|
19,292
|
|
|||||
Issuance of common stock
|
114
|
|
|
1
|
|
|
1,393
|
|
|
—
|
|
|
—
|
|
|
1,394
|
|
|||||
Exercise of stock options
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of restricted common stock
|
63
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Cancellation and retirement of restricted common stock
|
(117
|
)
|
|
(1
|
)
|
|
(1,630
|
)
|
|
—
|
|
|
—
|
|
|
(1,631
|
)
|
|||||
Accelerated vesting of restricted common stock and options
|
—
|
|
|
—
|
|
|
667
|
|
|
—
|
|
|
—
|
|
|
667
|
|
|||||
Amortization of restricted common stock
|
—
|
|
|
—
|
|
|
1,340
|
|
|
—
|
|
|
—
|
|
|
1,340
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,296
|
|
|
—
|
|
|
—
|
|
|
1,296
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(1,817
|
)
|
|
—
|
|
|
—
|
|
|
(1,817
|
)
|
|||||
Excess tax benefit on equity compensation
|
—
|
|
|
—
|
|
|
613
|
|
|
—
|
|
|
—
|
|
|
613
|
|
|||||
Balance – December 31, 2013
|
18,261
|
|
|
$
|
222
|
|
|
$
|
204,324
|
|
|
$
|
(33,306
|
)
|
|
$
|
(15,267
|
)
|
|
$
|
155,973
|
|
Net Income – 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
15,838
|
|
|
—
|
|
|
15,838
|
|
|||||
Issuance of common stock
|
70
|
|
|
—
|
|
|
1,110
|
|
|
—
|
|
|
—
|
|
|
1,110
|
|
|||||
Exercise of stock options
|
68
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
363
|
|
|||||
Issuance of restricted common stock
|
200
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cancellation and retirement of restricted common stock
|
(87
|
)
|
|
—
|
|
|
(1,357
|
)
|
|
—
|
|
|
—
|
|
|
(1,357
|
)
|
|||||
Accelerated vesting of restricted common stock and options
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Amortization of restricted common stock
|
—
|
|
|
—
|
|
|
1,806
|
|
|
—
|
|
|
—
|
|
|
1,806
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,616
|
|
|
—
|
|
|
—
|
|
|
2,616
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(1,840
|
)
|
|
—
|
|
|
—
|
|
|
(1,840
|
)
|
|||||
Performance-based stock award payments
|
—
|
|
|
—
|
|
|
(16,624
|
)
|
|
—
|
|
|
—
|
|
|
(16,624
|
)
|
|||||
Convertible subordinated notes due 2021
|
—
|
|
|
—
|
|
|
17,973
|
|
|
—
|
|
|
—
|
|
|
17,973
|
|
|||||
Excess tax benefit on equity compensation
|
—
|
|
|
—
|
|
|
3,990
|
|
|
—
|
|
|
—
|
|
|
3,990
|
|
|||||
Balance – December 31, 2014
|
18,512
|
|
|
$
|
224
|
|
|
$
|
212,386
|
|
|
$
|
(17,468
|
)
|
|
$
|
(15,267
|
)
|
|
$
|
179,875
|
|
Net Income – 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
20,853
|
|
|
—
|
|
|
20,853
|
|
|||||
Issuance of common stock
|
53
|
|
|
1
|
|
|
981
|
|
|
—
|
|
|
—
|
|
|
982
|
|
|||||
Exercise of stock options
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of restricted common stock
|
43
|
|
|
1
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Cancellation and retirement of restricted common stock
|
(75
|
)
|
|
(1
|
)
|
|
(1,607
|
)
|
|
—
|
|
|
—
|
|
|
(1,608
|
)
|
|||||
Amortization of restricted common stock
|
—
|
|
|
—
|
|
|
1,567
|
|
|
—
|
|
|
—
|
|
|
1,567
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,628
|
|
|
—
|
|
|
—
|
|
|
2,628
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(1,819
|
)
|
|
—
|
|
|
—
|
|
|
(1,819
|
)
|
|||||
Treasury stock acquired
|
(1,928
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,999
|
)
|
|
(44,999
|
)
|
|||||
Excess tax benefit on equity compensation
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Balance – December 31, 2015
|
16,648
|
|
|
$
|
225
|
|
|
$
|
214,250
|
|
|
$
|
3,385
|
|
|
$
|
(60,266
|
)
|
|
$
|
157,594
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
19,296
|
|
|
$
|
15,838
|
|
|
$
|
20,853
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
11,748
|
|
|
11,945
|
|
|
13,780
|
|
|||
Gain on sale of businesses and purchase of other assets
|
(6,091
|
)
|
|
(2,150
|
)
|
|
(49
|
)
|
|||
Impairment of goodwill
|
100
|
|
|
1,180
|
|
|
—
|
|
|||
Loss on early extinguishment of debt and other costs
|
—
|
|
|
1,042
|
|
|
—
|
|
|||
Amortization of deferred financing costs
|
362
|
|
|
908
|
|
|
921
|
|
|||
Accretion of discount on convertible subordinated notes
|
—
|
|
|
2,452
|
|
|
3,454
|
|
|||
Provision for losses on accounts receivable
|
2,005
|
|
|
2,877
|
|
|
1,679
|
|
|||
Stock-based compensation expense
|
3,583
|
|
|
4,622
|
|
|
4,444
|
|
|||
Deferred income tax expense
|
12,572
|
|
|
5,295
|
|
|
3,035
|
|
|||
Loss on redemption of convertible junior subordinated debentures
|
—
|
|
|
2,932
|
|
|
—
|
|
|||
Other
|
85
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities that provided (required) cash:
|
|
|
|
|
|
||||||
Accounts and preneed receivables
|
(3,329
|
)
|
|
(4,146
|
)
|
|
(2,310
|
)
|
|||
Inventories and other current assets
|
(337
|
)
|
|
(2,590
|
)
|
|
2,582
|
|
|||
Deferred charges and other
|
(35
|
)
|
|
(165
|
)
|
|
150
|
|
|||
Preneed funeral and cemetery trust investments
|
(1,415
|
)
|
|
(203
|
)
|
|
25,543
|
|
|||
Accounts payable
|
1,142
|
|
|
(562
|
)
|
|
1,445
|
|
|||
Accrued and other liabilities
|
(3,294
|
)
|
|
(1,529
|
)
|
|
509
|
|
|||
Deferred preneed funeral and cemetery revenue
|
1,187
|
|
|
303
|
|
|
329
|
|
|||
Deferred preneed funeral and cemetery receipts held in trust
|
2,266
|
|
|
(1,484
|
)
|
|
(26,461
|
)
|
|||
Net cash provided by operating activities
|
39,845
|
|
|
36,565
|
|
|
49,904
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisitions and land for new construction
|
(19,701
|
)
|
|
(57,874
|
)
|
|
(9,725
|
)
|
|||
Purchase of land and buildings previously leased
|
—
|
|
|
(7,600
|
)
|
|
(6,080
|
)
|
|||
Net proceeds from sale of businesses and other assets
|
10,184
|
|
|
2,192
|
|
|
65
|
|
|||
Capital expenditures
|
(10,695
|
)
|
|
(16,075
|
)
|
|
(29,744
|
)
|
|||
Net cash used in investing activities
|
(20,212
|
)
|
|
(79,357
|
)
|
|
(45,484
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net (payments) borrowings on the revolving credit facility
|
(7,800
|
)
|
|
3,600
|
|
|
52,100
|
|
|||
Net borrowings (payments) on the term loan
|
—
|
|
|
3,313
|
|
|
(9,375
|
)
|
|||
Proceeds from the issuance of convertible subordinated notes
|
—
|
|
|
143,750
|
|
|
—
|
|
|||
Payment of debt issuance costs related to the convertible subordinated notes
|
—
|
|
|
(4,650
|
)
|
|
—
|
|
|||
Payments on long-term debt and obligations under capital leases
|
(11,219
|
)
|
|
(840
|
)
|
|
(1,014
|
)
|
|||
Redemption of convertible junior subordinated debentures
|
—
|
|
|
(89,748
|
)
|
|
—
|
|
|||
Payments for performance-based stock awards
|
—
|
|
|
(16,150
|
)
|
|
—
|
|
|||
Proceeds from the exercise of stock options and employee stock purchase plan contributions
|
894
|
|
|
1,228
|
|
|
758
|
|
|||
Dividends on common stock
|
(1,817
|
)
|
|
(1,840
|
)
|
|
(1,819
|
)
|
|||
Dividends on redeemable preferred stock
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of loan origination costs
|
(621
|
)
|
|
(825
|
)
|
|
(13
|
)
|
|||
Excess tax benefit of equity compensation
|
613
|
|
|
3,990
|
|
|
64
|
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(44,999
|
)
|
|||
Net cash provided by (used in) financing activities
|
(19,954
|
)
|
|
41,828
|
|
|
(4,298
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(321
|
)
|
|
(964
|
)
|
|
122
|
|
|||
Cash and cash equivalents at beginning of year
|
1,698
|
|
|
1,377
|
|
|
413
|
|
|||
Cash and cash equivalents at end of year
|
$
|
1,377
|
|
|
$
|
413
|
|
|
$
|
535
|
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
66,957
|
|
|
$
|
72,697
|
|
Buildings and improvements
|
148,483
|
|
|
173,540
|
|
||
Furniture, equipment and automobiles
|
66,020
|
|
|
71,943
|
|
||
Property, plant and equipment, at cost
|
281,460
|
|
|
318,180
|
|
||
Less: accumulated depreciation
|
(95,249
|
)
|
|
(103,306
|
)
|
||
Property, plant and equipment, net
|
$
|
186,211
|
|
|
$
|
214,874
|
|
|
Purchase Price
|
||
Cash paid
|
$
|
9,725
|
|
Deferred payments
|
4,531
|
|
|
Contingent consideration
|
762
|
|
|
Purchase Price
|
$
|
15,018
|
|
Acquisition Date
|
Type of Business
|
|
Market
|
|
Assets
Acquired
(Excluding
Goodwill)
|
|
Goodwill
Recorded
|
|
Liabilities
and Debt
Assumed
|
||||||
February 25, 2015
|
Funeral home
|
|
Clarksville, TN
|
|
$
|
4.9
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
November 17, 2015
|
Funeral home
|
|
Wakeforest, NC
|
|
$
|
3.1
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
Purchase Price Allocation
|
||
Current assets
|
$
|
92
|
|
Property, plant & equipment
|
5,966
|
|
|
Goodwill
|
6,974
|
|
|
Deferred charges and other non-current assets
|
1,986
|
|
|
Purchase Price
|
$
|
15,018
|
|
|
Initial Purchase Price Allocation
|
|
Adjustments
|
|
Final Purchase Price Allocation
|
||||||
Current assets
|
$
|
1,998
|
|
|
128
|
|
|
2,126
|
|
||
Property, plant & equipment
|
16,457
|
|
|
2
|
|
|
16,459
|
|
|||
Preneed cemetery trust investments
|
3,632
|
|
|
—
|
|
|
3,632
|
|
|||
Preneed funeral trust investments
|
45
|
|
|
—
|
|
|
45
|
|
|||
Goodwill
|
33,826
|
|
|
3,827
|
|
|
37,653
|
|
|||
Deferred charges and other non-current assets
|
6,208
|
|
|
(3,918
|
)
|
|
2,290
|
|
|||
Cemetery perpetual care investments
|
7,491
|
|
|
—
|
|
|
7,491
|
|
|||
Obligations under capital leases
|
(1,960
|
)
|
|
—
|
|
|
(1,960
|
)
|
|||
Deferred preneed cemetery revenue
|
(1,679
|
)
|
|
(39
|
)
|
|
(1,718
|
)
|
|||
Deferred preneed cemetery receipts held in trust
|
(3,632
|
)
|
|
—
|
|
|
(3,632
|
)
|
|||
Deferred preneed funeral receipts held in trust
|
(45
|
)
|
|
—
|
|
|
(45
|
)
|
|||
Care trusts' corpus
|
(7,491
|
)
|
|
—
|
|
|
(7,491
|
)
|
|||
Cash paid
|
$
|
54,850
|
|
|
$
|
—
|
|
|
$
|
54,850
|
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
Goodwill at the beginning of year
|
$
|
221,087
|
|
|
$
|
257,442
|
|
Increase in goodwill related to acquisitions
|
37,653
|
|
|
6,974
|
|
||
Changes in previous estimates
|
(101
|
)
|
|
—
|
|
||
Net impairment and write-off related to divestitures
|
(1,197
|
)
|
|
—
|
|
||
Goodwill at the end of the year
|
$
|
257,442
|
|
|
$
|
264,416
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Revenues
|
$
|
4,164
|
|
|
$
|
817
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Operating income
|
729
|
|
|
235
|
|
|
—
|
|
|||
Impairment
|
(100
|
)
|
|
(1,180
|
)
|
|
—
|
|
|||
Net gain on disposal
|
6,091
|
|
|
1,594
|
|
|
—
|
|
|||
Income tax provision
|
(2,544
|
)
|
|
(257
|
)
|
|
—
|
|
|||
Income from discontinued operations, net of tax
|
$
|
4,176
|
|
|
$
|
392
|
|
|
$
|
—
|
|
|
December 31, 2014
|
|
|
December 31, 2015
|
|
||
Preneed cemetery trust investments, at market value
|
$
|
74,198
|
|
|
$
|
65,486
|
|
Less: allowance for contract cancellation
|
(2,226
|
)
|
|
(2,195
|
)
|
||
Preneed cemetery trust investments, net
|
$
|
71,972
|
|
|
$
|
63,291
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
8,296
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,296
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
2
|
|
458
|
|
|
—
|
|
|
(63
|
)
|
|
395
|
|
||||
Foreign debt
|
2
|
|
4,803
|
|
|
—
|
|
|
(695
|
)
|
|
4,108
|
|
||||
Corporate debt
|
2
|
|
22,968
|
|
|
85
|
|
|
(4,279
|
)
|
|
18,774
|
|
||||
Preferred stock
|
2
|
|
16,236
|
|
|
29
|
|
|
(885
|
)
|
|
15,380
|
|
||||
Mortgage backed securities
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock
|
1
|
|
20,387
|
|
|
682
|
|
|
(3,161
|
)
|
|
17,908
|
|
||||
Trust securities
|
|
|
$
|
73,148
|
|
|
$
|
796
|
|
|
$
|
(9,083
|
)
|
|
$
|
64,861
|
|
Accrued investment income
|
|
|
$
|
625
|
|
|
|
|
|
|
$
|
625
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
65,486
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
88.7
|
%
|
Due in one year or less
|
$
|
133
|
|
Due in one to five years
|
4,858
|
|
|
Due in five to ten years
|
2,324
|
|
|
Thereafter
|
31,342
|
|
|
Total fixed income securities
|
$
|
38,657
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
5,591
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,591
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
2
|
|
347
|
|
|
9
|
|
|
—
|
|
|
$
|
356
|
|
|||
Foreign debt
|
2
|
|
5,874
|
|
|
—
|
|
|
(237
|
)
|
|
5,637
|
|
||||
Corporate debt
|
2
|
|
30,108
|
|
|
362
|
|
|
(2,167
|
)
|
|
28,303
|
|
||||
Preferred stock
|
2
|
|
19,154
|
|
|
199
|
|
|
(325
|
)
|
|
19,028
|
|
||||
Mortgage backed securities
|
2
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Common stock
|
1
|
|
13,128
|
|
|
2,357
|
|
|
(966
|
)
|
|
14,519
|
|
||||
Trust securities
|
|
|
$
|
74,203
|
|
|
$
|
2,927
|
|
|
$
|
(3,695
|
)
|
|
$
|
73,435
|
|
Accrued investment income
|
|
|
$
|
763
|
|
|
|
|
|
|
$
|
763
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
74,198
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
99.0
|
%
|
|
December 31, 2015
|
||||||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal bonds
|
$
|
395
|
|
|
$
|
(63
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
395
|
|
|
$
|
(63
|
)
|
Foreign debt
|
3,680
|
|
|
(384
|
)
|
|
406
|
|
|
(312
|
)
|
|
4,086
|
|
|
(696
|
)
|
||||||
Corporate debt
|
14,468
|
|
|
(2,992
|
)
|
|
3,056
|
|
|
(1,287
|
)
|
|
17,524
|
|
|
(4,279
|
)
|
||||||
Preferred stock
|
10,285
|
|
|
(436
|
)
|
|
5,168
|
|
|
(448
|
)
|
|
15,453
|
|
|
(884
|
)
|
||||||
Common stock
|
12,029
|
|
|
(1,989
|
)
|
|
3,564
|
|
|
(1,172
|
)
|
|
15,593
|
|
|
(3,161
|
)
|
||||||
Total temporary impaired securities
|
$
|
40,857
|
|
|
$
|
(5,864
|
)
|
|
$
|
12,194
|
|
|
$
|
(3,219
|
)
|
|
$
|
53,051
|
|
|
$
|
(9,083
|
)
|
|
December 31, 2014
|
||||||||||||||||||||||
|
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
|
$
|
5,629
|
|
|
$
|
(237
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,629
|
|
|
$
|
(237
|
)
|
Corporate debt
|
18,051
|
|
|
(778
|
)
|
|
2,016
|
|
|
(1,389
|
)
|
|
20,067
|
|
|
(2,167
|
)
|
||||||
Preferred stock
|
10,342
|
|
|
(289
|
)
|
|
3,236
|
|
|
(36
|
)
|
|
13,578
|
|
|
(325
|
)
|
||||||
Common stock
|
6,904
|
|
|
(911
|
)
|
|
65
|
|
|
(55
|
)
|
|
6,969
|
|
|
(966
|
)
|
||||||
Total temporary impaired securities
|
$
|
40,926
|
|
|
$
|
(2,215
|
)
|
|
$
|
5,317
|
|
|
$
|
(1,480
|
)
|
|
$
|
46,243
|
|
|
$
|
(3,695
|
)
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Investment income
|
$
|
3,349
|
|
|
$
|
2,840
|
|
|
$
|
2,562
|
|
Realized gains
|
3,018
|
|
|
5,712
|
|
|
2,952
|
|
|||
Realized losses
|
(763
|
)
|
|
(2,789
|
)
|
|
(3,671
|
)
|
|||
Expenses and taxes
|
(2,934
|
)
|
|
(1,716
|
)
|
|
(1,790
|
)
|
|||
Increase in deferred preneed cemetery receipts held in trust
|
(2,670
|
)
|
|
(4,047
|
)
|
|
(53
|
)
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2014
|
|
|
December 31, 2015
|
|
||
Preneed funeral trust investments, at market value
|
$
|
100,579
|
|
|
$
|
88,444
|
|
Less: allowance for contract cancellation
|
(2,972
|
)
|
|
(2,891
|
)
|
||
Preneed funeral trust investments, net
|
$
|
97,607
|
|
|
$
|
85,553
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
21,458
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,458
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
1,492
|
|
|
24
|
|
|
(12
|
)
|
|
1,504
|
|
||||
Municipal Bonds
|
2
|
|
478
|
|
|
—
|
|
|
(66
|
)
|
|
412
|
|
||||
Foreign debt
|
2
|
|
4,938
|
|
|
—
|
|
|
(711
|
)
|
|
4,227
|
|
||||
Corporate debt
|
2
|
|
24,787
|
|
|
133
|
|
|
(4,711
|
)
|
|
20,209
|
|
||||
Preferred stock
|
2
|
|
17,496
|
|
|
158
|
|
|
(914
|
)
|
|
16,740
|
|
||||
Mortgage backed securities
|
2
|
|
273
|
|
|
4
|
|
|
(4
|
)
|
|
273
|
|
||||
Common stock
|
1
|
|
20,864
|
|
|
738
|
|
|
(3,114
|
)
|
|
18,488
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fixed income
|
2
|
|
959
|
|
|
—
|
|
|
(82
|
)
|
|
877
|
|
||||
Other investments
|
2
|
|
3,598
|
|
|
—
|
|
|
(30
|
)
|
|
3,568
|
|
||||
Trust securities
|
|
|
$
|
96,343
|
|
|
$
|
1,057
|
|
|
$
|
(9,644
|
)
|
|
$
|
87,756
|
|
Accrued investment income
|
|
|
$
|
688
|
|
|
|
|
|
|
$
|
688
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
88,444
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
91.1
|
%
|
Due in one year or less
|
$
|
144
|
|
Due in one to five years
|
5,794
|
|
|
Due in five to ten years
|
3,272
|
|
|
Thereafter
|
34,155
|
|
|
Total fixed income securities
|
$
|
43,365
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
17,501
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,501
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
2,037
|
|
|
32
|
|
|
(15
|
)
|
|
2,054
|
|
||||
U.S. agency obligations
|
2
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||
Foreign debt
|
2
|
|
4,653
|
|
|
—
|
|
|
(188
|
)
|
|
4,465
|
|
||||
Corporate debt
|
2
|
|
24,761
|
|
|
469
|
|
|
(1,718
|
)
|
|
23,512
|
|
||||
Preferred stock
|
2
|
|
16,166
|
|
|
256
|
|
|
(261
|
)
|
|
16,161
|
|
||||
Mortgage backed securities
|
2
|
|
309
|
|
|
8
|
|
|
(3
|
)
|
|
314
|
|
||||
Common stock
|
1
|
|
10,544
|
|
|
1,926
|
|
|
(783
|
)
|
|
11,687
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
14,126
|
|
|
1,370
|
|
|
(181
|
)
|
|
15,315
|
|
||||
Fixed income
|
2
|
|
5,351
|
|
|
115
|
|
|
(72
|
)
|
|
5,394
|
|
||||
Other investments
|
2
|
|
3,560
|
|
|
—
|
|
|
(29
|
)
|
|
3,531
|
|
||||
Trust securities
|
|
|
$
|
99,038
|
|
|
$
|
4,176
|
|
|
$
|
(3,250
|
)
|
|
$
|
99,964
|
|
Accrued investment income
|
|
|
$
|
615
|
|
|
|
|
|
|
$
|
615
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
100,579
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
100.9
|
%
|
|
December 31, 2015
|
||||||||||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,504
|
|
|
$
|
(12
|
)
|
|
$
|
1,504
|
|
|
$
|
(12
|
)
|
Municipal Bonds
|
413
|
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
|
413
|
|
|
(66
|
)
|
||||||
Foreign debt
|
3,763
|
|
|
(392
|
)
|
|
416
|
|
|
(319
|
)
|
|
4,179
|
|
|
(711
|
)
|
||||||
Corporate debt
|
15,929
|
|
|
(3,294
|
)
|
|
3,364
|
|
|
(1,417
|
)
|
|
19,293
|
|
|
(4,711
|
)
|
||||||
Preferred stock
|
10,623
|
|
|
(451
|
)
|
|
5,338
|
|
|
(463
|
)
|
|
15,961
|
|
|
(914
|
)
|
||||||
Mortgage backed securities
|
—
|
|
|
—
|
|
|
272
|
|
|
(4
|
)
|
|
272
|
|
|
(4
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
11,848
|
|
|
(1,959
|
)
|
|
3,510
|
|
|
(1,154
|
)
|
|
15,358
|
|
|
(3,113
|
)
|
||||||
Equity and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fixed income
|
1
|
|
|
—
|
|
|
876
|
|
|
(82
|
)
|
|
877
|
|
|
(82
|
)
|
||||||
Other investments
|
—
|
|
|
—
|
|
|
42
|
|
|
(31
|
)
|
|
42
|
|
|
(31
|
)
|
||||||
Total temporary impaired securities
|
$
|
42,577
|
|
|
$
|
(6,162
|
)
|
|
$
|
15,322
|
|
|
$
|
(3,482
|
)
|
|
$
|
57,899
|
|
|
$
|
(9,644
|
)
|
|
December 31, 2014
|
||||||||||||||||||||||
|
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
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
836
|
|
|
$
|
(15
|
)
|
|
$
|
1,336
|
|
|
$
|
(15
|
)
|
Foreign debt
|
4,471
|
|
|
(188
|
)
|
|
—
|
|
|
—
|
|
|
4,471
|
|
|
(188
|
)
|
||||||
Corporate debt
|
14,310
|
|
|
(617
|
)
|
|
1,598
|
|
|
(1,101
|
)
|
|
15,908
|
|
|
(1,718
|
)
|
||||||
Preferred stock
|
8,300
|
|
|
(232
|
)
|
|
2,597
|
|
|
(29
|
)
|
|
10,897
|
|
|
(261
|
)
|
||||||
Mortgage backed securities
|
—
|
|
|
—
|
|
|
51
|
|
|
(3
|
)
|
|
51
|
|
|
(3
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
5,594
|
|
|
(739
|
)
|
|
53
|
|
|
(44
|
)
|
|
5,647
|
|
|
(783
|
)
|
||||||
Equity and other
|
4,204
|
|
|
(180
|
)
|
|
6
|
|
|
(1
|
)
|
|
4,210
|
|
|
(181
|
)
|
||||||
Fixed income
|
888
|
|
|
(19
|
)
|
|
1,026
|
|
|
(53
|
)
|
|
1,914
|
|
|
(72
|
)
|
||||||
Other investments
|
—
|
|
|
—
|
|
|
42
|
|
|
(29
|
)
|
|
42
|
|
|
(29
|
)
|
||||||
Total temporary impaired securities
|
$
|
38,267
|
|
|
$
|
(1,975
|
)
|
|
$
|
6,209
|
|
|
$
|
(1,275
|
)
|
|
$
|
44,476
|
|
|
$
|
(3,250
|
)
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Investment income
|
$
|
3,190
|
|
|
$
|
3,065
|
|
|
$
|
2,819
|
|
Realized gains
|
7,957
|
|
|
7,184
|
|
|
3,931
|
|
|||
Realized losses
|
(5,743
|
)
|
|
(2,313
|
)
|
|
(3,979
|
)
|
|||
Expenses and taxes
|
(1,669
|
)
|
|
(1,470
|
)
|
|
(988
|
)
|
|||
Increase in deferred preneed funeral receipts held in trust
|
(3,735
|
)
|
|
(6,466
|
)
|
|
(1,783
|
)
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Purchases
|
$
|
(38,592
|
)
|
|
$
|
(57,297
|
)
|
|
$
|
(26,021
|
)
|
Sales
|
39,853
|
|
|
60,352
|
|
|
42,582
|
|
|
As of December 31,
|
||||||
|
2014
|
|
2015
|
||||
Beginning balance
|
$
|
1,347
|
|
|
$
|
2,140
|
|
Write-offs and cancellations
|
(1,172
|
)
|
|
(1,462
|
)
|
||
Provision
|
1,965
|
|
|
1,087
|
|
||
Ending balance
|
$
|
2,140
|
|
|
$
|
1,765
|
|
|
31-60
Past Due
|
|
61-90
Past Due
|
|
91-120
Past Due
|
|
>120
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total Financing
Receivables
|
||||||||||||||
Recognized revenue
|
$
|
758
|
|
|
$
|
446
|
|
|
$
|
225
|
|
|
$
|
1,061
|
|
|
$
|
2,490
|
|
|
$
|
22,742
|
|
|
$
|
25,232
|
|
Deferred revenue
|
273
|
|
|
207
|
|
|
103
|
|
|
335
|
|
|
918
|
|
|
10,380
|
|
|
11,298
|
|
|||||||
Total contracts
|
$
|
1,031
|
|
|
$
|
653
|
|
|
$
|
328
|
|
|
$
|
1,396
|
|
|
$
|
3,408
|
|
|
$
|
33,122
|
|
|
$
|
36,530
|
|
|
31-60
Past Due
|
|
61-90
Past Due
|
|
91-120
Past Due
|
|
>120
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total Financing
Receivables
|
||||||||||||||
Recognized revenue
|
$
|
756
|
|
|
$
|
407
|
|
|
$
|
250
|
|
|
$
|
1,439
|
|
|
$
|
2,852
|
|
|
$
|
21,394
|
|
|
$
|
24,246
|
|
Deferred revenue
|
296
|
|
|
204
|
|
|
116
|
|
|
720
|
|
|
1,336
|
|
|
8,333
|
|
|
9,669
|
|
|||||||
Total contracts
|
$
|
1,052
|
|
|
$
|
611
|
|
|
$
|
366
|
|
|
$
|
2,159
|
|
|
$
|
4,188
|
|
|
$
|
29,727
|
|
|
$
|
33,915
|
|
|
December 31, 2014
|
|
|
December 31, 2015
|
|
||
|
(in thousands)
|
||||||
Preneed trust funds, at cost
|
$
|
13,205
|
|
|
$
|
13,963
|
|
Less: allowance for contract cancellation
|
(396
|
)
|
|
(419
|
)
|
||
Receivables from preneed trusts, net
|
$
|
12,809
|
|
|
$
|
13,544
|
|
|
Historical
Cost Basis
|
|
Fair Value
|
||||
|
(in thousands)
|
||||||
As of December 31, 2015
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,898
|
|
|
$
|
2,898
|
|
Fixed income investments
|
8,423
|
|
|
8,426
|
|
||
Mutual funds and common stocks
|
2,626
|
|
|
2,625
|
|
||
Annuities
|
16
|
|
|
16
|
|
||
Total
|
$
|
13,963
|
|
|
$
|
13,965
|
|
|
Historical
Cost Basis
|
|
Fair Value
|
||||
|
(in thousands)
|
||||||
As of December 31, 2014
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,834
|
|
|
$
|
2,834
|
|
Fixed income investments
|
7,880
|
|
|
7,893
|
|
||
Mutual funds and common stocks
|
2,467
|
|
|
2,586
|
|
||
Annuities
|
24
|
|
|
24
|
|
||
Total
|
$
|
13,205
|
|
|
$
|
13,337
|
|
|
December 31, 2014
|
|
|
December 31, 2015
|
|
||
Trust assets, at market value
|
$
|
48,670
|
|
|
$
|
43,127
|
|
Obligations due from trust
|
(528
|
)
|
|
(711
|
)
|
||
Care trusts’ corpus
|
$
|
48,142
|
|
|
$
|
42,416
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
5,472
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,472
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
2
|
|
325
|
|
|
—
|
|
|
(45
|
)
|
|
280
|
|
||||
Foreign debt
|
2
|
|
3,232
|
|
|
—
|
|
|
(480
|
)
|
|
2,752
|
|
||||
Corporate debt
|
2
|
|
16,216
|
|
|
57
|
|
|
(3,094
|
)
|
|
13,179
|
|
||||
Preferred stock
|
2
|
|
11,263
|
|
|
20
|
|
|
(611
|
)
|
|
10,672
|
|
||||
Common stock
|
1
|
|
11,945
|
|
|
393
|
|
|
(1,939
|
)
|
|
10,399
|
|
||||
Trust securities
|
|
|
$
|
48,453
|
|
|
$
|
470
|
|
|
$
|
(6,169
|
)
|
|
$
|
42,754
|
|
Accrued investment income
|
|
|
$
|
373
|
|
|
|
|
|
|
$
|
373
|
|
||||
Cemetery perpetual care investments
|
|
|
|
|
|
|
|
|
$
|
43,127
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
88.2
|
%
|
Due in one year or less
|
$
|
79
|
|
Due in one to five years
|
3,391
|
|
|
Due in five to ten years
|
1,690
|
|
|
Thereafter
|
21,723
|
|
|
Total fixed income securities
|
$
|
26,883
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
3,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,206
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
2
|
|
229
|
|
|
5
|
|
|
—
|
|
|
234
|
|
||||
Foreign debt
|
2
|
|
3,871
|
|
|
—
|
|
|
(156
|
)
|
|
3,715
|
|
||||
Corporate debt
|
2
|
|
19,911
|
|
|
248
|
|
|
(1,428
|
)
|
|
18,731
|
|
||||
Preferred stock
|
2
|
|
12,694
|
|
|
137
|
|
|
(214
|
)
|
|
12,617
|
|
||||
Common stock
|
1
|
|
8,747
|
|
|
1,568
|
|
|
(653
|
)
|
|
9,662
|
|
||||
Trust securities
|
|
|
$
|
48,658
|
|
|
$
|
1,958
|
|
|
$
|
(2,451
|
)
|
|
$
|
48,165
|
|
Accrued investment income
|
|
|
$
|
505
|
|
|
|
|
|
|
$
|
505
|
|
||||
Cemetery perpetual care investments
|
|
|
|
|
|
|
|
|
$
|
48,670
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
99.0
|
%
|
|
December 31, 2015
|
||||||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal bonds
|
$
|
280
|
|
|
$
|
(45
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
280
|
|
|
$
|
(45
|
)
|
Foreign debt
|
2,541
|
|
|
(265
|
)
|
|
281
|
|
|
(215
|
)
|
|
2,822
|
|
|
(480
|
)
|
||||||
Corporate debt
|
10,463
|
|
|
(2,164
|
)
|
|
2,210
|
|
|
(931
|
)
|
|
12,673
|
|
|
(3,095
|
)
|
||||||
Preferred stock
|
7,100
|
|
|
(301
|
)
|
|
3,568
|
|
|
(309
|
)
|
|
10,668
|
|
|
(610
|
)
|
||||||
Common stock
|
7,379
|
|
|
(1,220
|
)
|
|
2,186
|
|
|
(719
|
)
|
|
9,565
|
|
|
(1,939
|
)
|
||||||
Total temporary impaired securities
|
$
|
27,763
|
|
|
$
|
(3,995
|
)
|
|
$
|
8,245
|
|
|
$
|
(2,174
|
)
|
|
$
|
36,008
|
|
|
$
|
(6,169
|
)
|
|
December 31, 2014
|
||||||||||||||||||||||
|
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
|
$
|
3,716
|
|
|
$
|
(156
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,716
|
|
|
$
|
(156
|
)
|
Corporate debt
|
11,893
|
|
|
(513
|
)
|
|
1,328
|
|
|
(915
|
)
|
|
13,221
|
|
|
(1,428
|
)
|
||||||
Preferred stock
|
6,821
|
|
|
(191
|
)
|
|
2,133
|
|
|
(23
|
)
|
|
8,954
|
|
|
(214
|
)
|
||||||
Common stock
|
4,663
|
|
|
(616
|
)
|
|
44
|
|
|
(37
|
)
|
|
4,707
|
|
|
(653
|
)
|
||||||
Total temporary impaired securities
|
$
|
27,093
|
|
|
$
|
(1,476
|
)
|
|
$
|
3,505
|
|
|
$
|
(975
|
)
|
|
$
|
30,598
|
|
|
$
|
(2,451
|
)
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Realized gains
|
$
|
2,172
|
|
|
$
|
3,468
|
|
|
$
|
1,773
|
|
Realized losses
|
(542
|
)
|
|
(1,748
|
)
|
|
(2,431
|
)
|
|||
Decrease (increase) in Care trusts’ corpus
|
(1,630
|
)
|
|
(1,720
|
)
|
|
658
|
|
|||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Investment income
|
$
|
4,063
|
|
|
$
|
4,713
|
|
|
$
|
5,315
|
|
Realized gains, net
|
1,511
|
|
|
1,112
|
|
|
436
|
|
|||
Total
|
$
|
5,574
|
|
|
$
|
5,825
|
|
|
$
|
5,751
|
|
•
|
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 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 U.S. agency obligations, municipal bonds, corporate debt, preferred stocks, foreign debt, mortgage backed securities, fixed income mutual funds and other investments.
|
•
|
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
December 31, 2015
and
2014
, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
Prepaid agreements not to compete, net of accumulated amortization of $5,105 and $5,404, respectively
|
$
|
1,159
|
|
|
$
|
1,912
|
|
Deferred loan costs, net of accumulated amortization of $2,809 and $3,246, respectively
|
1,870
|
|
|
1,445
|
|
||
Convertible subordinated notes issuance costs, net of accumulated amortization of $375 and $858, respectively
|
3,252
|
|
|
2,769
|
|
||
Tradenames
|
7,660
|
|
|
8,856
|
|
||
Other
|
323
|
|
|
210
|
|
||
Deferred charges and other non-current assets
|
$
|
14,264
|
|
|
$
|
15,192
|
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
Revolving credit facility, secured, floating rate
|
$
|
40,500
|
|
|
$
|
92,600
|
|
Term loan, secured, floating rate
|
120,312
|
|
|
110,937
|
|
||
Acquisition debt
|
1,205
|
|
|
4,929
|
|
||
Less: current portion
|
(9,630
|
)
|
|
(12,012
|
)
|
||
Total long-term debt
|
$
|
152,387
|
|
|
$
|
196,454
|
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
Long-term liabilities:
|
|
|
|
||||
Principal amount
|
$
|
143,750
|
|
|
$
|
143,750
|
|
Unamortized discount of liability component
|
(29,208
|
)
|
|
(25,754
|
)
|
||
Carrying value of the liability component
|
$
|
114,542
|
|
|
$
|
117,996
|
|
|
|
|
|
||||
Equity component carrying value
|
$
|
17,973
|
|
|
$
|
17,973
|
|
|
|
Principal Maturity
|
|
Discount Amortization
|
|
Present
Value
|
||||||
Years ending December 31,
|
|
|
|
|
|
|
||||||
2016
|
|
$
|
—
|
|
|
$
|
(3,867
|
)
|
|
$
|
(3,867
|
)
|
2017
|
|
—
|
|
|
(4,328
|
)
|
|
(4,328
|
)
|
|||
2018
|
|
—
|
|
|
(4,844
|
)
|
|
(4,844
|
)
|
|||
2019
|
|
—
|
|
|
(5,422
|
)
|
|
(5,422
|
)
|
|||
2020
|
|
—
|
|
|
(6,068
|
)
|
|
(6,068
|
)
|
|||
2021 and thereafter
|
|
143,750
|
|
|
(1,225
|
)
|
|
142,525
|
|
|||
|
|
$
|
143,750
|
|
|
$
|
(25,754
|
)
|
|
$
|
117,996
|
|
15.
|
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES PAYABLE TO AFFILIATE AND COMPANY OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES OF CARRIAGE SERVICES CAPITAL TRUST
|
|
Future Minimum Lease
Payments
|
||||||
|
Operating
Leases
|
|
Capital
Leases
|
||||
|
(in thousands)
|
||||||
Years ending December 31,
|
|
|
|
||||
2016
|
$
|
4,790
|
|
|
$
|
477
|
|
2017
|
4,111
|
|
|
483
|
|
||
2018
|
3,174
|
|
|
421
|
|
||
2019
|
2,900
|
|
|
388
|
|
||
2020
|
2,041
|
|
|
334
|
|
||
Thereafter
|
1,718
|
|
|
3,329
|
|
||
Total future minimum lease payments
|
$
|
18,734
|
|
|
$
|
5,432
|
|
Less: amount representing interest (rates ranging from 7% to 11.5%)
|
|
|
(2,334
|
)
|
|||
Less: current portion of obligations under capital leases
|
|
|
(223
|
)
|
|||
Long-term obligations under capital leases
|
|
|
$
|
2,875
|
|
|
Non-Compete
|
|
Consulting
|
|
Employment
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Years ending December 31,
|
|
|
|
|
|
|
|
||||||||
2016
|
$
|
1,612
|
|
|
$
|
1,366
|
|
|
$
|
2,135
|
|
|
$
|
5,113
|
|
2017
|
1,296
|
|
|
1,281
|
|
|
1,205
|
|
|
3,782
|
|
||||
2018
|
986
|
|
|
673
|
|
|
205
|
|
|
1,864
|
|
||||
2019
|
776
|
|
|
440
|
|
|
—
|
|
|
1,216
|
|
||||
2020
|
500
|
|
|
307
|
|
|
—
|
|
|
807
|
|
||||
Thereafter
|
458
|
|
|
235
|
|
|
—
|
|
|
693
|
|
||||
|
$
|
5,628
|
|
|
$
|
4,302
|
|
|
$
|
3,545
|
|
|
$
|
13,475
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
U. S. federal provision (benefit)
|
$
|
(672
|
)
|
|
$
|
1,188
|
|
|
$
|
9,840
|
|
State provision (benefit)
|
(522
|
)
|
|
772
|
|
|
862
|
|
|||
Total current provision (benefit)
|
$
|
(1,194
|
)
|
|
$
|
1,960
|
|
|
$
|
10,702
|
|
Deferred:
|
|
|
|
|
|
||||||
U. S. federal provision
|
$
|
8,708
|
|
|
$
|
5,117
|
|
|
$
|
1,928
|
|
State provision (benefit)
|
1,731
|
|
|
178
|
|
|
1,107
|
|
|||
Total deferred provision
|
$
|
10,439
|
|
|
$
|
5,295
|
|
|
$
|
3,035
|
|
Total income tax provision
|
$
|
9,245
|
|
|
$
|
7,255
|
|
|
$
|
13,737
|
|
|
Year Ended December 31,
|
|
|||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
|||||||||
Federal statutory rate
|
$
|
8,284
|
|
|
34.0
|
|
%
|
$
|
7,719
|
|
|
34.0
|
|
%
|
$
|
12,105
|
|
|
35.0
|
|
%
|
Effect of state income taxes, net of federal benefit
|
1,462
|
|
|
6.0
|
|
|
831
|
|
|
3.7
|
|
|
1,618
|
|
|
4.7
|
|
|
|||
Effect of non-deductible expenses and other, net
|
(633
|
)
|
|
(2.6
|
)
|
|
583
|
|
|
2.6
|
|
|
155
|
|
|
0.4
|
|
|
|||
Change in valuation allowance
|
132
|
|
|
0.5
|
|
|
(138
|
)
|
|
(0.6
|
)
|
|
(141
|
)
|
|
(0.4
|
)
|
|
|||
Reduction for tax year 2011 federal audit
|
—
|
|
|
—
|
|
|
(1,740
|
)
|
|
(7.7
|
)
|
|
—
|
|
|
—
|
|
|
|||
Total
|
$
|
9,245
|
|
|
37.9
|
|
%
|
$
|
7,255
|
|
|
32.0
|
|
%
|
$
|
13,737
|
|
|
39.7
|
|
%
|
|
|
December 31, 2014
|
|
December 31, 2015
|
||||
Unrecognized tax benefit
|
|
$
|
515
|
|
|
$
|
814
|
|
Interest accrued on unrecognized tax benefits
|
|
$
|
—
|
|
|
$
|
44
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
2,735
|
|
|
$
|
2,132
|
|
Tax credit carryforwards
|
127
|
|
|
133
|
|
||
State bonus depreciation
|
1,513
|
|
|
993
|
|
||
Accrued liabilities and other
|
9,115
|
|
|
9,949
|
|
||
Amortization of non-compete agreements
|
815
|
|
|
897
|
|
||
Preneed liabilities, net
|
9,935
|
|
|
10,324
|
|
||
Total deferred income tax assets
|
24,240
|
|
|
24,428
|
|
||
Less valuation allowance
|
(330
|
)
|
|
(189
|
)
|
||
Total deferred income tax assets
|
$
|
23,910
|
|
|
$
|
24,239
|
|
Deferred income tax liabilities:
|
|
|
|
||||
Amortization and depreciation
|
$
|
(43,441
|
)
|
|
$
|
(48,318
|
)
|
Convertible subordinated notes due 2021
|
(11,685
|
)
|
|
(10,184
|
)
|
||
Prepaids and other
|
(1,448
|
)
|
|
(1,436
|
)
|
||
Total deferred income tax liabilities
|
(56,574
|
)
|
|
(59,938
|
)
|
||
Total net deferred tax liabilities
|
$
|
(32,664
|
)
|
|
$
|
(35,699
|
)
|
Current deferred tax asset
|
$
|
3,750
|
|
|
$
|
4,257
|
|
Non-current deferred tax liabilities
|
(36,414
|
)
|
|
(39,956
|
)
|
||
Total net deferred tax liabilities
|
$
|
(32,664
|
)
|
|
$
|
(35,699
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Unrecognized tax benefit at beginning of year
|
$
|
7,747
|
|
|
$
|
7,832
|
|
|
$
|
515
|
|
Reductions based on tax positions related to the prior year
|
(93
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions for tax year 2011 federal audit
|
—
|
|
|
(7,310
|
)
|
|
—
|
|
|||
Additions based on tax positions related to the current year
|
209
|
|
|
—
|
|
|
299
|
|
|||
Reductions as a result of a lapse of the applicable statute of limitations
|
(31
|
)
|
|
(7
|
)
|
|
—
|
|
|||
Unrecognized tax benefit at end of year
|
$
|
7,832
|
|
|
$
|
515
|
|
|
$
|
814
|
|
|
Shares
Reserved
|
|
Shares
Available to
Issue
|
|
Options
Outstanding
|
|||
Amended and Restated 2006 Plan
|
5,000
|
|
|
1,157
|
|
|
1,695
|
|
|
2013
|
|
2014
|
|
2015
|
|||
Dividend yield
|
0.59
|
%
|
|
0.50
|
%
|
|
0.44
|
%
|
Expected volatility
|
33.63
|
%
|
|
33.34
|
%
|
|
32.62
|
%
|
Risk-free interest rate
|
0.41
|
%
|
|
0.99
|
%
|
|
1.13
|
%
|
Expected holding period (years)
|
3.6
|
|
|
3.7
|
|
|
3.6
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|||||||||
Outstanding at beginning of period
|
312
|
|
|
$
|
5.41
|
|
|
766
|
|
|
$
|
13.03
|
|
|
1,381
|
|
|
$
|
17.07
|
|
Granted
|
563
|
|
|
$
|
16.73
|
|
|
804
|
|
|
$
|
20.20
|
|
|
653
|
|
|
$
|
22.66
|
|
Exercised
|
(45
|
)
|
|
$
|
5.33
|
|
|
(68
|
)
|
|
$
|
5.47
|
|
|
(110
|
)
|
|
$
|
14.36
|
|
Canceled or expired
|
(64
|
)
|
|
$
|
13.82
|
|
|
(121
|
)
|
|
$
|
18.80
|
|
|
(229
|
)
|
|
$
|
20.39
|
|
Outstanding at end of year
|
766
|
|
|
$
|
13.03
|
|
|
1,381
|
|
|
$
|
17.07
|
|
|
1,695
|
|
|
$
|
18.95
|
|
Exercisable at end of year
|
192
|
|
|
$
|
5.36
|
|
|
329
|
|
|
$
|
10.97
|
|
|
583
|
|
|
$
|
15.00
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Actual Ranges of Exercise Prices
|
Number Outstanding at 12/31/15
|
|
Weighted-Average
Remaining
Contractual Life
|
|
Weighted-Average
Exercise Price
|
|
Number Exercisable at 12/31/15
|
|
Weighted-Average
Exercise Price
|
||||||
$4.78 - $5.94
|
149,021
|
|
|
5.31
|
|
$
|
5.55
|
|
|
149,021
|
|
|
$
|
5.55
|
|
$16.73 - $17.00
|
396,500
|
|
|
7.16
|
|
$
|
16.73
|
|
|
254,498
|
|
|
$
|
16.73
|
|
$20.26 - $22.58
|
1,149,868
|
|
|
4.62
|
|
$
|
21.45
|
|
|
179,400
|
|
|
$
|
20.39
|
|
$4.78 - $22.58
|
1,695,389
|
|
|
5.27
|
|
$
|
18.95
|
|
|
582,919
|
|
|
$
|
15.00
|
|
Unvested stock awards
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Unvested at January 1, 2015
|
330
|
|
|
$
|
16.20
|
|
Awards
|
43
|
|
|
22.40
|
|
|
Vestings
|
(159
|
)
|
|
10.64
|
|
|
Cancellations
|
(11
|
)
|
|
18.36
|
|
|
Unvested at December 31, 2015
|
202
|
|
|
$
|
20.64
|
|
|
Accumulated Other Comprehensive Income
|
||
Balance at December 31, 2014
|
$
|
—
|
|
Increase in net unrealized gains associated with available-for-sale securities of the trusts
|
(22,573
|
)
|
|
Reclassification of net unrealized gain activity attributable to the
Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus’
|
22,573
|
|
|
Balance at December 31, 2015
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Numerator for basic earnings per share:
|
|
|
|
|
|
||||||
Numerator from continuing operations
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
15,120
|
|
|
$
|
15,446
|
|
|
$
|
20,853
|
|
Less: Earnings allocated to unvested restricted stock
|
(314
|
)
|
|
(295
|
)
|
|
(257
|
)
|
|||
Income attributable to continuing operations
|
$
|
14,806
|
|
|
$
|
15,151
|
|
|
$
|
20,596
|
|
|
|
|
|
|
|
||||||
Numerator from discontinued operations
|
|
|
|
|
|
||||||
Income from discontinued operations
|
$
|
4,176
|
|
|
$
|
392
|
|
|
$
|
—
|
|
Less: Earnings allocated to unvested restricted stock
|
(85
|
)
|
|
(8
|
)
|
|
—
|
|
|||
Income attributable to discontinued operations
|
$
|
4,091
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Numerator for diluted earnings per share:
|
|
|
|
|
|
||||||
Adjustment for diluted earnings per share:
|
|
|
|
|
|
||||||
Interest on convertible junior subordinated debentures, net of tax
|
$
|
3,454
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,454
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Income attributable to continuing operations
|
$
|
18,260
|
|
|
$
|
15,151
|
|
|
$
|
20,596
|
|
Income attributable to discontinuing operations
|
$
|
4,091
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Denominator for basic earnings per common share - weighted average shares outstanding
|
17,826
|
|
|
18,108
|
|
|
17,791
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
175
|
|
|
149
|
|
|
246
|
|
|||
Convertible junior subordinated debentures
|
4,392
|
|
|
—
|
|
|
—
|
|
|||
Convertible subordinated notes
|
—
|
|
|
—
|
|
|
276
|
|
|||
Denominator for diluted earnings per common share - weighted average shares outstanding
|
22,393
|
|
|
18,257
|
|
|
18,313
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.83
|
|
|
$
|
0.84
|
|
|
$
|
1.16
|
|
Discontinued operations
|
0.23
|
|
|
0.02
|
|
|
—
|
|
|||
Basic earnings per common share
|
$
|
1.06
|
|
|
$
|
0.86
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.82
|
|
|
$
|
0.83
|
|
|
$
|
1.12
|
|
Discontinued operations
|
0.18
|
|
|
0.02
|
|
|
—
|
|
|||
Diluted earnings per common share
|
$
|
1.00
|
|
|
$
|
0.85
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2014
|
|
2015
|
||||
|
(in thousands)
|
||||||
Other Current Assets:
|
|
|
|
||||
Deferred taxes
|
$
|
3,750
|
|
|
$
|
4,256
|
|
Income tax receivables
|
3,293
|
|
|
279
|
|
||
Other current assets
|
101
|
|
|
172
|
|
||
Total other current assets
|
$
|
7,144
|
|
|
$
|
4,707
|
|
|
|
|
|
||||
Accrued Liabilities:
|
|
|
|
||||
Accrued salaries and wages
|
$
|
2,073
|
|
|
$
|
2,383
|
|
Accrued incentive compensation
|
5,660
|
|
|
5,862
|
|
||
Accrued vacation
|
1,978
|
|
|
2,239
|
|
||
Accrued insurance
|
2,171
|
|
|
2,246
|
|
||
Accrued interest
|
1,232
|
|
|
1,295
|
|
||
Accrued ad valorem and franchise taxes
|
537
|
|
|
604
|
|
||
Accrued commissions
|
654
|
|
|
470
|
|
||
Other accrued liabilities
|
898
|
|
|
1,442
|
|
||
Total accrued liabilities
|
$
|
15,203
|
|
|
$
|
16,541
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Goods
|
|
|
|
|
|
||||||
Funeral
|
$
|
64,409
|
|
|
$
|
66,877
|
|
|
$
|
71,399
|
|
Cemetery
|
30,392
|
|
|
32,300
|
|
|
35,479
|
|
|||
Total goods
|
$
|
94,801
|
|
|
$
|
99,177
|
|
|
$
|
106,878
|
|
Services
|
|
|
|
|
|
||||||
Funeral
|
$
|
89,442
|
|
|
$
|
97,375
|
|
|
$
|
104,969
|
|
Cemetery
|
10,087
|
|
|
10,556
|
|
|
11,178
|
|
|||
Total services
|
$
|
99,529
|
|
|
$
|
107,931
|
|
|
$
|
116,147
|
|
Financial revenue
|
|
|
|
|
|
||||||
Preneed funeral commission income
|
$
|
1,853
|
|
|
$
|
2,036
|
|
|
$
|
1,484
|
|
Preneed funeral trust earnings
|
7,378
|
|
|
7,447
|
|
|
7,966
|
|
|||
Cemetery trust earnings
|
8,095
|
|
|
8,123
|
|
|
8,440
|
|
|||
Cemetery finance charges
|
1,418
|
|
|
1,410
|
|
|
1,587
|
|
|||
Total financial revenue
|
$
|
18,744
|
|
|
$
|
19,016
|
|
|
$
|
19,477
|
|
Total revenues
|
$
|
213,074
|
|
|
$
|
226,124
|
|
|
$
|
242,502
|
|
|
|
|
|
|
|
||||||
Cost of revenues:
|
|
|
|
|
|
||||||
Goods
|
|
|
|
|
|
||||||
Funeral
|
$
|
52,362
|
|
|
$
|
54,421
|
|
|
$
|
56,819
|
|
Cemetery
|
22,222
|
|
|
23,800
|
|
|
24,600
|
|
|||
Total goods
|
$
|
74,584
|
|
|
$
|
78,221
|
|
|
$
|
81,419
|
|
Services
|
|
|
|
|
|
||||||
Funeral
|
$
|
46,030
|
|
|
$
|
49,357
|
|
|
$
|
51,236
|
|
Cemetery
|
6,543
|
|
|
6,860
|
|
|
6,924
|
|
|||
Total services
|
$
|
52,573
|
|
|
$
|
56,217
|
|
|
$
|
58,160
|
|
Financial expenses
|
|
|
|
|
|
||||||
Preneed funeral commissions
|
$
|
1,213
|
|
|
$
|
1,078
|
|
|
$
|
1,031
|
|
Trust administration fees
|
227
|
|
|
249
|
|
|
353
|
|
|||
Total financial expenses
|
$
|
1,440
|
|
|
$
|
1,327
|
|
|
$
|
1,384
|
|
Total cost of revenues
|
$
|
128,597
|
|
|
$
|
135,765
|
|
|
$
|
140,963
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
63,253
|
|
|
$
|
59,261
|
|
|
$
|
58,378
|
|
|
$
|
61,610
|
|
Gross profit
|
22,209
|
|
|
18,248
|
|
|
17,360
|
|
|
19,691
|
|
||||
Net income from continuing operations
|
$
|
6,418
|
|
|
$
|
4,557
|
|
|
$
|
4,444
|
|
|
$
|
5,434
|
|
Net income available to common stockholders
|
$
|
6,418
|
|
|
$
|
4,557
|
|
|
$
|
4,444
|
|
|
$
|
5,434
|
|
Basic earnings per common share:
|
$
|
0.35
|
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
Diluted earnings per common share: (a)
|
$
|
0.34
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
55,652
|
|
|
$
|
56,504
|
|
|
$
|
54,549
|
|
|
$
|
59,419
|
|
Gross profit
|
18,015
|
|
|
17,989
|
|
|
15,077
|
|
|
18,927
|
|
||||
Net income from continuing operations
|
$
|
1,631
|
|
|
$
|
3,883
|
|
|
$
|
4,565
|
|
|
$
|
5,367
|
|
Net income (loss) from discontinued operations
|
587
|
|
|
(637
|
)
|
|
431
|
|
|
11
|
|
||||
Net income available to common stockholders
|
$
|
2,218
|
|
|
$
|
3,246
|
|
|
$
|
4,996
|
|
|
$
|
5,378
|
|
Basic earnings per common share:
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.27
|
|
|
$
|
0.29
|
|
Diluted earnings per common share: (a)
|
$
|
0.12
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
|
$
|
0.29
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2014
|
|
2015
|
||||||
Cash paid for interest and financing costs
|
$
|
12,248
|
|
|
$
|
8,894
|
|
|
$
|
9,159
|
|
Cash paid for taxes
|
655
|
|
|
2,674
|
|
|
8,283
|
|
|||
Fair value of stock, stock options and performance awards issued to directors, officers, and certain other employees
|
3,822
|
|
|
8,219
|
|
|
4,879
|
|
|||
Restricted common stock withheld for payroll taxes
|
1,610
|
|
|
1,305
|
|
|
1,580
|
|
|||
Net withdrawals (deposits) from / into preneed funeral trusts
|
(3,891
|
)
|
|
(418
|
)
|
|
12,054
|
|
|||
Net withdrawals (deposits) from / into preneed cemetery trusts
|
(1,324
|
)
|
|
1
|
|
|
8,681
|
|
|||
Net withdrawals from perpetual care trusts
|
3,091
|
|
|
1,857
|
|
|
5,543
|
|
|||
Net increase in preneed receivables
|
(1,331
|
)
|
|
(1,731
|
)
|
|
(1,714
|
)
|
|||
Net (deposits) withdrawals of receivables into / from preneed trusts
|
709
|
|
|
(1,643
|
)
|
|
(735
|
)
|
|||
Net change in preneed funeral receivables increasing deferred revenue
|
860
|
|
|
677
|
|
|
483
|
|
|||
Net change in preneed cemetery receivables increasing (decreasing) deferred revenue
|
327
|
|
|
(374
|
)
|
|
(154
|
)
|
|||
Net (withdrawals) deposits from / into preneed funeral trust accounts (decreasing) increasing deferred preneed funeral receipts held in trust
|
3,891
|
|
|
418
|
|
|
(12,054
|
)
|
|||
Net (withdrawals) deposits from / into preneed cemetery trust accounts (decreasing) increasing deferred cemetery receipts held in trust
|
1,324
|
|
|
(1
|
)
|
|
(8,681
|
)
|
|||
Net withdrawals from perpetual care trust accounts decreasing care trusts’ corpus
|
(2,949
|
)
|
|
(1,901
|
)
|
|
(5,726
|
)
|
Description
|
Balance at
beginning
of year
|
|
Charged to
costs and
expenses
|
|
Deduction
|
|
Balance at end
of year
|
||||||||
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
1,177
|
|
|
$
|
1,225
|
|
|
$
|
1,555
|
|
|
$
|
847
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
2,059
|
|
|
$
|
768
|
|
|
$
|
1,002
|
|
|
$
|
1,825
|
|
Employee severance accruals
|
$
|
158
|
|
|
$
|
755
|
|
|
$
|
664
|
|
|
$
|
249
|
|
Litigation reserves
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
17
|
|
Valuation allowance of the deferred tax asset
|
$
|
317
|
|
|
$
|
227
|
|
|
$
|
76
|
|
|
$
|
468
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
847
|
|
|
$
|
1,705
|
|
|
$
|
1,425
|
|
|
$
|
1,127
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
1,825
|
|
|
$
|
1,284
|
|
|
$
|
770
|
|
|
$
|
2,339
|
|
Employee severance accruals
|
$
|
249
|
|
|
$
|
681
|
|
|
$
|
714
|
|
|
$
|
216
|
|
Litigation reserves
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
3
|
|
Valuation allowance of the deferred tax asset
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
330
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
1,127
|
|
|
$
|
966
|
|
|
$
|
1,039
|
|
|
$
|
1,054
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
2,339
|
|
|
$
|
712
|
|
|
$
|
1,009
|
|
|
$
|
2,042
|
|
Employee severance accruals
|
$
|
216
|
|
|
$
|
698
|
|
|
$
|
634
|
|
|
$
|
280
|
|
Litigation reserves
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Valuation allowance of the deferred tax asset
|
$
|
330
|
|
|
$
|
—
|
|
|
$
|
141
|
|
|
$
|
189
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
/s/ Melvin C. Payne
|
Melvin C. Payne
|
Chief Executive Officer and Chairman of the Board
|
/s/ Carl B. Brink
|
Carl B. Brink
|
Co-Chief Financial Officer and Treasurer
|
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
1,695,389
|
|
|
$
|
18.95
|
|
|
1,157,349
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
1,695,389
|
|
|
$
|
18.95
|
|
|
1,157,349
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
|
Page
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Asset Sale Agreement, dated as of March 3, 2014, by and among Carriage Services of Louisiana, Inc., Carriage Funeral Holdings, Inc., SCI Louisiana Funeral Services, Inc., S.E. Funeral Homes of Louisiana, LLC and S.E. Funeral Homes of Virgina, LLC. Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed March 5, 2014.
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation, as amended, of the Company. Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 1996.
|
|
|
|
3.2
|
|
Certificate of Amendment dated May 7, 1997. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 1997.
|
|
|
|
3.3
|
|
Certificate of Amendment dated May 7, 2002. Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002.
|
|
|
|
3.4
|
|
Amended and Restated Bylaws of the Company. Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-05545) filed on July 18, 1996.
|
|
|
|
3.5
|
|
Amendments to the Bylaws of the Company effective December 18, 2000. Incorporated by reference to Exhibit 3.8 to the Company’s Annual Report on Form 10-K for its year ended December 31, 2000.
|
|
|
|
3.6
|
|
Amendments to the Bylaws of the Company effective May 20, 2008. Incorporated by reference to Exhibit to the Company’s current report on Form 8-K filed May 28, 2008.
|
|
|
|
4.1
|
|
Certificate of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.6 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.2
|
|
Amended and Restated Declaration of Trust of Carriage Services Capital Trust, dated June 3, 1999 among the Company, Wilmington Trust Company, Wilmington Trust Company, and Mark W. Duffey, Thomas C. Livengood and Terry E. Sanford. Incorporated by reference to Exhibit 4.7 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.3
|
|
Amendment No. 1 to Amended and Restated Declaration of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.14 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.4
|
|
Amendment No. 2 to Amended and Restated Declaration of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.15 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.5
|
|
Common Securities Guarantee, dated June 3, 1999 by Carriage Services, Inc. as Guarantor. Incorporated by reference to Exhibit 4.13 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.6
|
|
Indenture, dated as of March 19, 2014, by and among Carriage Services, Inc. and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 19, 2014.
|
|
|
|
10.1
|
|
Credit Agreement dated August 30, 2012, among Carriage Services, Inc. as the Borrower, and Bank of America, N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 4, 2012.
|
|
|
|
10.2
|
|
First Amendment to Credit Agreement dated November 29, 2012, among Carriage Services, Inc. as the Borrower, and Bank of American N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2012.
|
|
|
|
10.3
|
|
Second Amendment to Credit Agreement dated February 14, 2013, among Carriage Services, Inc. as the Borrower, and Bank of America, N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2012.
|
|
|
|
10.4
|
|
Third Amendment and Commitment Increase dated April 23, 2013 among Carriage Services, Inc., the Lenders and Bank of America, N.A. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 25, 2013.
|
|
|
|
10.5
|
|
Fourth Amendment to Credit Agreement, dated as of February 27, 2014, by and among Carriage Services, Inc., the banks listed on the signature page thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed March 5, 2014.
|
|
|
|
10.6
|
|
Fifth Amendment to Credit Agreement, dated as of April 14, 2014, by and among Carriage Services, Inc., the banks listed on the signature page thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 16, 2014.
|
|
|
|
10.7
|
|
Sixth Amendment to Credit Agreement, dated May 20, 2015, by and among the Company, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 22, 2015.
|
|
|
|
10.8
|
|
Seventh Amendment to Credit Agreement, dated May 20, 2015, by and among the Company, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 9, 2016.
|
|
|
|
10.9
|
|
Second Amended and Restated Employment Agreement dated March 14, 2012 between Carriage Services, Inc. and Melvin C. Payne. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2012. †
|
|
|
|
10.10
|
|
First Amendment to Second Amended and Restated Employment Agreement by and between Carriage Services, Inc. and Melvin C. Payne dated March 3, 2014. Incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2014. †
|
|
|
|
10.11
|
|
Indemnity Agreement with Melvin C. Payne dated December 18, 2000. Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2000. †
|
|
|
|
10.12
|
|
Employment Agreement by and between Carriage Services, Inc. and David J. DeCarlo dated March 3, 2014. Incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2014. †
|
|
|
|
10.13
|
|
Employment Agreement with Mark R. Bruce dated January 4, 2011. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2013. †
|
|
|
|
10.14
|
|
Employment Letter with Mark R. Bruce dated March 14, 2012. Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2013. †
|
|
|
|
10.15
|
|
Employment Agreement with Paul D. Elliott dated August 31, 2012. Incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q dated March 31, 2013. †
|
|
|
|
10.16
|
|
Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2012.
|
|
|
|
10.17
|
|
First Amendment to Carriage Services, Inc. Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K filed March 5, 2014.†
|
|
|
|
10.18
|
|
Amended and Restated Carriage Services, Inc. 2007 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended September 30, 2013.
|
|
|
|
10.19
|
|
Form of Employee Performance-Based Stock Award Agreement. Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed August 7, 2012.
|
|
|
|
10.20
|
|
Form of Director Performance-Based Stock Award Agreement. Incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2012. †
|
|
|
|
10.21
|
|
Director Compensation Policy dated March 5, 2012. Incorporated by reference to Exhibit 10.24 to Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2011. †
|
|
|
|
10.22
|
|
Incentive Stock Option Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2013. †
|
|
|
|
10.23
|
|
Restricted Stock Agreement Under Carriage Services, Inc. Second and Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2013. †
|
|
|
|
*10.24
|
|
Form of Employee Performance Award Agreement.
|
|
|
|
*12.1
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
16.1
|
|
Letter from KPMG LLP to Securities and Exchange Commission, dated March 19, 2014. Incorporated by reference to Exhibit 16.1 on the Company's Current Report on Form 8-K filed March 19, 2014.
|
|
|
|
*21.1
|
|
Subsidiaries of the Company.
|
|
|
|
*23.1
|
|
Consent of GRANT THORNTON LLP.
|
|
|
|
*23.2
|
|
Consent of KPMG LLP.
|
|
|
|
*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 Carl B. Brink in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**32
|
|
Certification of Periodic Financial Reports by Melvin C. Payne and Carl B. Brink in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350.
|
|
|
|
*101
|
|
Interactive Data Files.
|
(*)
|
Filed herewith.
|
(**)
|
Furnished herewith.
|
(†)
|
Management contract or compensatory plan or arrangement.
|
CARRIAGE SERVICES, INC.
|
||
|
|
|
By:
|
|
/s/ Melvin C. Payne
|
|
|
Melvin C. Payne
Chief Executive Officer and Chairman of the Board
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Melvin C. Payne
|
|
Chief Executive Officer and Chairman of the Board
|
|
|
Melvin C. Payne
|
|
(Principal Executive Officer)
|
|
February 23, 2016
|
|
|
|
||
/s/ David J. DeCarlo
|
|
President and Vice Chairman of the Board
|
|
February 23, 2016
|
David J. DeCarlo
|
|
|
|
|
|
|
|
|
|
/s/ Viki K. Blinderman
|
|
Co-Chief Financial Officer, Chief Accounting Officer and Secretary
|
|
February 23, 2016
|
Viki K. Blinderman
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Carl B. Brink
|
|
Co-Chief Financial Officer and Treasurer
|
|
February 23, 2016
|
Carl B. Brink
|
|
(Principal Financial Officer)
|
|
|
|
|
|
||
/s/ Donald D. Patteson Jr.
|
|
Director
|
|
February 23, 2016
|
Donald D. Patteson Jr.
|
|
|
|
|
|
|
|
||
/s/ Richard W. Scott
|
|
Director
|
|
February 23, 2016
|
Richard W. Scott
|
|
|
|
|
|
|
|
||
/s/ Barry K. Fingerhut
|
|
Director
|
|
February 23, 2016
|
Barry K. Fingerhut
|
|
|
|
|
|
|
|
|
|
/s/ Bryan D. Leibman
|
|
Director
|
|
February 23, 2016
|
Bryan D. Leibman
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Asset Sale Agreement, dated as of March 3, 2014, by and among Carriage Services of Louisiana, Inc., Carriage Funeral Holdings, Inc., SCI Louisiana Funeral Services, Inc., S.E. Funeral Homes of Louisiana, LLC and S.E. Funeral Homes of Virgina, LLC. Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed March 5, 2014.
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation, as amended, of the Company. Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 1996.
|
|
|
|
3.2
|
|
Certificate of Amendment dated May 7, 1997. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 1997.
|
|
|
|
3.3
|
|
Certificate of Amendment dated May 7, 2002. Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002.
|
|
|
|
3.4
|
|
Amended and Restated Bylaws of the Company. Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-05545) filed on July 18, 1996.
|
|
|
|
3.5
|
|
Amendments to the Bylaws of the Company effective December 18, 2000. Incorporated by reference to Exhibit 3.8 to the Company’s Annual Report on Form 10-K for its year ended December 31, 2000.
|
|
|
|
3.6
|
|
Amendments to the Bylaws of the Company effective May 20, 2008. Incorporated by reference to Exhibit to the Company’s current report on Form 8-K filed May 28, 2008.
|
|
|
|
4.1
|
|
Certificate of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.6 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.2
|
|
Amended and Restated Declaration of Trust of Carriage Services Capital Trust, dated June 3, 1999 among the Company, Wilmington Trust Company, Wilmington Trust Company, and Mark W. Duffey, Thomas C. Livengood and Terry E. Sanford. Incorporated by reference to Exhibit 4.7 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.3
|
|
Amendment No. 1 to Amended and Restated Declaration of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.14 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.4
|
|
Amendment No. 2 to Amended and Restated Declaration of Trust of Carriage Services Capital Trust. Incorporated by reference to Exhibit 4.15 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.5
|
|
Common Securities Guarantee, dated June 3, 1999 by Carriage Services, Inc. as Guarantor. Incorporated by reference to Exhibit 4.13 to the Company’s Form S-3 Registration Statement No. 333-84141.
|
|
|
|
4.6
|
|
Indenture, dated as of March 19, 2014, by and among Carriage Services, Inc. and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 19, 2014.
|
|
|
|
10.1
|
|
Credit Agreement dated August 30, 2012, among Carriage Services, Inc. as the Borrower, and Bank of America, N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 4, 2012.
|
|
|
|
10.2
|
|
First Amendment to Credit Agreement dated November 29, 2012, among Carriage Services, Inc. as the Borrower, and Bank of American N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2012.
|
|
|
10.3
|
|
Second Amendment to Credit Agreement dated February 14, 2013, among Carriage Services, Inc. as the Borrower, and Bank of America, N.A. as the Administrative Agent and Sole Lender. Incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2012.
|
|
|
|
10.4
|
|
Third Amendment and Commitment Increase dated April 23, 2013 among Carriage Services, Inc., the Lenders and Bank of America, N.A. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 25, 2013.
|
|
|
|
10.5
|
|
Fourth Amendment to Credit Agreement, dated as of February 27, 2014, by and among Carriage Services, Inc., the banks listed on the signature page thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed March 5, 2014.
|
|
|
|
10.6
|
|
Fifth Amendment to Credit Agreement, dated as of April 14, 2014, by and among Carriage Services, Inc., the banks listed on the signature page thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 16, 2014.
|
|
|
|
10.7
|
|
Sixth Amendment to Credit Agreement, dated May 20, 2015, by and among the Company, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 22, 2015.
|
|
|
|
10.8
|
|
Seventh Amendment to Credit Agreement, dated May 20, 2015, by and among the Company, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 9, 2016.
|
|
|
|
10.9
|
|
Second Amended and Restated Employment Agreement dated March 14, 2012 between Carriage Services, Inc. and Melvin C. Payne. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2012. †
|
|
|
|
10.10
|
|
First Amendment to Second Amended and Restated Employment Agreement by and between Carriage Services, Inc. and Melvin C. Payne dated March 3, 2014. Incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2014. †
|
|
|
|
10.11
|
|
Indemnity Agreement with Melvin C. Payne dated December 18, 2000. Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2000. †
|
|
|
|
10.12
|
|
Employment Agreement by and between Carriage Services, Inc. and David J. DeCarlo dated March 3, 2014. Incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2014. †
|
|
|
|
10.13
|
|
Employment Agreement with Mark R. Bruce dated January 4, 2011. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2013. †
|
|
|
|
10.14
|
|
Employment Letter with Mark R. Bruce dated March 14, 2012. Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its quarter ended March 31, 2013. †
|
|
|
|
10.15
|
|
Employment Agreement with Paul D. Elliott dated August 31, 2012. Incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q dated March 31, 2013. †
|
|
|
|
10.16
|
|
Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2012.
|
|
|
|
10.17
|
|
First Amendment to Carriage Services, Inc. Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K filed March 5, 2014.†
|
|
|
|
10.18
|
|
Amended and Restated Carriage Services, Inc. 2007 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended September 30, 2013.
|
|
|
|
10.19
|
|
Form of Employee Performance-Based Stock Award Agreement. Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed August 7, 2012.
|
|
|
|
10.20
|
|
Form of Director Performance-Based Stock Award Agreement. Incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2012. †
|
|
|
|
10.21
|
|
Director Compensation Policy dated March 5, 2012. Incorporated by reference to Exhibit 10.24 to Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2011. †
|
|
|
|
10.22
|
|
Incentive Stock Option Agreement Under Carriage Services, Inc. Second Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2013. †
|
|
|
|
10.23
|
|
Restricted Stock Agreement Under Carriage Services, Inc. Second and Amended and Restated 2006 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its quarter ended June 30, 2013. †
|
|
|
|
*10.24
|
|
Form of Employee Performance Award Agreement.
|
|
|
|
*12.1
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
16.1
|
|
Letter from KPMG LLP to Securities and Exchange Commission, dated March 19, 2014. Incorporated by reference to Exhibit 16.1 on the Company's Current Report on Form 8-K filed March 19, 2014.
|
|
|
|
*21.1
|
|
Subsidiaries of the Company.
|
|
|
|
*23.1
|
|
Consent of GRANT THORNTON LLP.
|
|
|
|
*23.2
|
|
Consent of KPMG LLP.
|
|
|
|
*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 Carl B. Brink in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**32
|
|
Certification of Periodic Financial Reports by Melvin C. Payne and Carl B. Brink in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350.
|
|
|
|
*101
|
|
Interactive Data Files.
|
(*)
|
Filed herewith.
|
(**)
|
Furnished herewith.
|
(†)
|
Management contract or compensatory plan or arrangement.
|
•
|
“A” is the product of 25% and the EBITDA Earned Percentage (as defined below); and
|
•
|
“B” is the product of 75% and the TSR Earned Percentage (as defined below).
|
|
Below Threshold
|
Threshold
|
Target
|
Maximum
|
Average Adjusted Consolidated EBITDA Margin
|
˂ 30%
|
30%
|
31%
|
>
32%
|
EBITDA Earned Percentage*
|
0%
|
50%
|
100%
|
200%
|
•
|
If the Company Stock Price Performance exceeds the Russell 3000 Index Performance determined as of the last day of the Performance Period, then the Baseline Percentage shall be increased by the percentage by which the Company Stock Price Performance exceeds the Russell 3000 Index Performance, multiplied by two (2); or
|
•
|
If the Russell 3000 Index Performance exceeds the Company Stock Price Performance determined as of the last day of the Performance Period, then the Baseline Percentage shall be decreased by the percentage by which the Russell 3000 Index Performance exceeds the Company Stock Price Performance, multiplied by three (3). The TSR Earned Percentage shall be determined as of the last day of each Performance Period, and shall not be less than 0% nor more than 200%.
|
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
17,596
|
|
|
$
|
19,446
|
|
|
$
|
12,260
|
|
|
$
|
9,325
|
|
|
$
|
9,563
|
|
Amortization of capitalized expenses related to debt
|
|
709
|
|
|
685
|
|
|
362
|
|
|
983
|
|
|
996
|
|
|||||
Rental expense factor
|
|
1,864
|
|
|
1,965
|
|
|
2,180
|
|
|
2,130
|
|
|
2,177
|
|
|||||
Total fixed charges
|
|
$
|
20,169
|
|
|
$
|
22,096
|
|
|
$
|
14,802
|
|
|
$
|
12,438
|
|
|
$
|
12,736
|
|
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before income taxes
|
|
$
|
12,138
|
|
|
$
|
19,249
|
|
|
$
|
24,462
|
|
|
$
|
22,701
|
|
|
$
|
34,990
|
|
Add fixed charges before capitalized interest
|
|
20,169
|
|
|
22,096
|
|
|
14,802
|
|
|
12,438
|
|
|
12,736
|
|
|||||
Total earnings available for fixed charges
|
|
$
|
32,307
|
|
|
$
|
41,345
|
|
|
$
|
39,264
|
|
|
$
|
35,139
|
|
|
$
|
47,726
|
|
Ratio of earnings to fixed charges
(1)
|
|
1.60
|
|
|
1.87
|
|
|
2.65
|
|
|
2.83
|
|
|
3.75
|
|
(1)
|
For purposes of computing the ratios of earnings to fixed charges: (i) earnings consist of income from continuing operations before provision for income taxes plus fixed charges (excluding capitalized interest) and (ii) “fixed charges” consist of interest expensed and capitalized, amortization of debt discount and expense relating to indebtedness and the portion of rental expense representative of the interest factor attributable to leases for rental property.
|
|
|
|
NAME
|
|
JURISDICTION OF INCORPORATION
|
Carriage Services, Inc.
|
|
Delaware
|
Carriage Funeral Holdings, Inc.
|
|
Delaware
|
CFS Funeral Services, Inc.
|
|
Delaware
|
Carriage Holding Company, Inc.
|
|
Delaware
|
Carriage Funeral Services of Michigan, Inc.
|
|
Michigan
|
Carriage Funeral Services of Kentucky, Inc.
|
|
Kentucky
|
Carriage Funeral Services of California, Inc.
|
|
California
|
Carriage Cemetery Services of Idaho, Inc.
|
|
Idaho
|
Wilson & Kratzer Mortuaries
|
|
California
|
Rolling Hills Memorial Park
|
|
California
|
Carriage Services of Connecticut, Inc.
|
|
Connecticut
|
CSI Funeral Services of Massachusetts, Inc.
|
|
Massachusetts
|
CHC Insurance Agency of Ohio, Inc.
|
|
Ohio
|
Carriage Services of New Mexico, Inc.
|
|
New Mexico
|
Forastiere Family Funeral Service, Inc.
|
|
Massachusetts
|
Carriage Cemetery Services, Inc.
|
|
Texas
|
Carriage Services of Oklahoma, LLC
|
|
Oklahoma
|
Carriage Services of Nevada, Inc.
|
|
Nevada
|
Hubbard Funeral Home, Inc.
|
|
Maryland
|
Carriage Team California (Cemetery), LLC
|
|
Delaware
|
Carriage Team California (Funeral), LLC
|
|
Delaware
|
Carriage Team Florida (Cemetery), LLC
|
|
Delaware
|
Carriage Team Florida (Funeral), LLC
|
|
Delaware
|
Carriage Services of Ohio, LLC
|
|
Delaware
|
Carriage Team Kansas, LLC
|
|
Delaware
|
Carriage Municipal Cemetery Services of Nevada, Inc.
|
|
Nevada
|
Carriage Cemetery Services of California, Inc.
|
|
California
|
Carriage Insurance Agency of Massachusetts, Inc.
|
|
Massachusetts
|
Carriage Internet Strategies, Inc.
|
|
Delaware
|
Carriage Management, Inc.
|
|
Delaware
|
Cochrane’s Chapel of the Roses, Inc.
|
|
California
|
Horizon Cremation Society, Inc.
|
|
California
|
Carriage Life Events, Inc.
|
|
Delaware
|
Carriage Pennsylvania Holdings, Inc.
|
|
Delaware
|
Carriage Funeral Management, Inc.
|
|
Delaware
|
Carriage Florida Holdings, Inc.
|
|
Delaware
|
Cloverdale Park, Inc.
|
|
Idaho
|
Cataudella Funeral Home, Inc.
|
|
Massachusetts
|
Carriage Services Investment Advisors, Inc.
|
|
Delaware
|
Carriage Merger VI, Inc.
|
|
Delaware
|
CSRE Holdings, Inc.
|
|
Delaware
|
Carriage Merger VIII, Inc.
|
|
Delaware
|
Carriage Merger IX, Inc.
|
|
Delaware
|
Carriage Merger X, Inc.
|
|
Delaware
|
Carriage Services of Louisiana, Inc.
|
|
Louisiana
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 23, 2016
|
|
/s/ Melvin C. Payne
|
|
|
|
Melvin C. Payne
|
|
|
|
Chief Executive Officer and Chairman of the Board
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 23, 2016
|
|
/s/ Carl B. Brink
|
|
|
|
Carl B. Brink
|
|
|
|
Co-Chief Financial Officer and Treasurer
|
|
|
|
(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:
|
February 23, 2016
|
|
/s/ Melvin C. Payne
|
|
|
|
Melvin C. Payne
|
|
|
|
Chief Executive Officer and Chairman of the Board
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Carl B. Brink
|
|
|
|
Carl B. Brink
|
|
|
|
Co-Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|