ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the year ended, December 31, 2018
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or
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______________ to _____________
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Delaware
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76-0423828
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3040 Post Oak Blvd., Suite 300, Houston, Texas
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77056
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(Address of principal executive offices)
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(Zip Code)
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(Title of each class)
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(Name of each exchange on which registered)
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Common Stock, $.01 Par Value
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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our ability to find and retain skilled personnel;
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•
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our ability to execute our growth strategy;
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•
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the execution of our Standards Operating, 4E Leadership and Standard Acquisition Models;
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•
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the effects of competition;
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•
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changes in the number of deaths in our markets;
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•
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changes in consumer preferences;
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•
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our ability to generate preneed sales;
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•
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the investment performance of our funeral and cemetery trust funds;
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•
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fluctuations in interest rates;
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•
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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;
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•
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the timely and full payment of death benefits related to preneed funeral contracts funded through life insurance contracts;
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•
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the financial condition of third-party insurance companies that fund our preneed funeral contracts;
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•
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increased or unanticipated costs, such as insurance or taxes;
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•
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our level of indebtedness and the cash required to service our indebtedness;
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•
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changes in federal income tax laws and regulations and the implementation and interpretation of these laws and regulations by the Internal Revenue Service;
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•
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effects of the application of other applicable laws and regulations, including changes in such regulations or the interpretation thereof;
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•
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consolidation of the funeral and cemetery industry; and
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•
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other factors and uncertainties inherent in the funeral and cemetery industry.
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ITEM 1.
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BUSINESS.
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•
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solicited feedback on the reasons for our portfolio performance decline, first from our Standards Council and subsequently from all of our Regional Partners and Directors of Support;
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•
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Mel Payne, our Chief Executive Officer, has directed more of his time and attention to operations and is actively engaging, coaching and mentoring all of our remaining operating leadership on the proper definition of their roles in support of the long-term success of each Managing Partner and business;
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•
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updated and rebooted our Funeral and Cemetery Standards as well as the groupings that we utilize to review our businesses to ensure alignment with changing preferences of client families and our High Performance and Value Creation Trends Restoration Program;
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•
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redefined Standards Achievement success and updated criteria for the
Being The Best
and
Good To Great
incentive programs; and
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•
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continued to explore ways in which we can develop support services and resource tools, either internally or through third parties, that can be made available to our Managing Partners and Sales Managers. We expect that this support focus, on areas such as social media, will better prepare our field leaders to deal with the changing competitive dynamics in each market.
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•
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Honesty, integrity and quality in all that we do;
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•
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Hard work, pride of accomplishment and shared success through employee ownership;
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•
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Belief in the power of people through individual initiative and teamwork;
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•
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Outstanding service and profitability go hand-in-hand; and
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•
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Growth of the Company is driven by decentralization and partnership.
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•
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Standards Operating Model;
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•
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4E Leadership Model; and
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•
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Strategic Acquisition Model.
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•
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Balanced Operating Model
– We believe a decentralized structure works best in the funeral and cemetery 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.
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•
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Incentives Aligned with Standards –
Empowering local managers, who we call 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. Our five year incentive award, called the “
Good to Great Award
,” rewards Managing Partners with a bonus at the end of five years, equal to a ratio of four to six times their average annual bonus, if they are able to achieve an annual compound growth rate of 2% over a five year period. After each five year incentive plan is achieved and paid out, a new five year plan period begins. To date, we have had three performance periods in which we have paid $3.8 million to the Managing Partners who have earned a bonus under this program.
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•
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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.
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•
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cultural alignment;
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•
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volume and price trends;
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•
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size of business;
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•
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size of market;
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•
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competitive standing;
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•
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demographics;
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•
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strength of brand; and
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•
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barriers to entry.
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•
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our ability to establish and maintain market share positions supported by strong local heritage and relationships;
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•
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our ability to effectively respond to the increasing trends towards cremation packaging complimentary services and merchandise;
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•
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our ability to control salary, merchandise and other controllable costs;
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•
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our ability to exercise pricing leverage related to our atneed business to increase average revenue per contract;
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•
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demographic trends in terms of population growth and average age, which impact death rates and number of deaths; and
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•
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our response to fluctuations in capital markets and interest rates, which affect investment earnings on trust funds and our securities portfolio within the trust funds, which would offset lower pricing power as preneed contracts mature.
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•
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size and success of our sales organization;
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•
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local perceptions and heritage of our cemeteries;
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•
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our ability to adapt to changes in the economy and consumer confidence; and
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•
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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.
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2016
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2017
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2018
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|||
Preneed funeral trust funds
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17.0
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%
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11.5
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%
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(6.5
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)%
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Preneed cemetery trust funds
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19.6
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%
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13.1
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%
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(8.4
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)%
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Perpetual care trust funds
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19.2
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%
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12.8
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%
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(8.0
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)%
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•
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continuing to require us and certain of our subsidiaries to dedicate a substantial portion of our cash flow from operations to the payment of our indebtedness, thereby reducing the funds available for operations and any future business opportunities;
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•
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limiting flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
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•
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placing us at a competitive disadvantage compared to our competitors that have less indebtedness;
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•
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increasing our vulnerability to adverse general economic or industry conditions;
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•
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making us and our subsidiaries more vulnerable to increases in interest rates, as borrowings under our New Credit Facility are at variable rates; and
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•
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limiting our ability to obtain additional financing to fund working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS.
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ITEM 2.
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PROPERTIES.
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Number of
Funeral Homes
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Number of
Cemeteries
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||||||||
State
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Owned
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Leased
(1)
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Owned
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Managed
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||||
California
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23
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5
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4
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—
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Colorado
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2
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—
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—
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—
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Connecticut
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8
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2
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—
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—
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Florida
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11
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5
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5
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—
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Georgia
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4
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—
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—
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|
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—
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Idaho
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5
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1
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3
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—
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Illinois
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2
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1
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1
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—
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Kansas
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2
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—
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—
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|
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—
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Kentucky
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8
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1
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1
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|
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—
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Louisiana
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3
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1
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1
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|
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—
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Maryland
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1
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|
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—
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|
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—
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|
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—
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Massachusetts
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12
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—
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|
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—
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|
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—
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Michigan
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2
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—
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—
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|
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—
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Montana
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2
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|
1
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1
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|
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—
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Nevada
|
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2
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|
|
—
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|
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2
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|
|
1
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New Jersey
|
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4
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|
1
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|
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—
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|
|
—
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New Mexico
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1
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|
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—
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|
|
—
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|
|
—
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New York
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6
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|
1
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|
|
—
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|
|
—
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|
North Carolina
|
|
7
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|
|
1
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|
|
1
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|
|
—
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|
Ohio
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5
|
|
|
—
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|
|
—
|
|
|
—
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|
Oklahoma
|
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6
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—
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|
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2
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|
|
—
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|
Pennsylvania
|
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2
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|
—
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|
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—
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|
|
—
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Rhode Island
|
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4
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|
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—
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|
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—
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|
|
—
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|
Tennessee
|
|
5
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|
|
—
|
|
|
—
|
|
|
—
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|
Texas
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|
21
|
|
|
1
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|
|
7
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|
|
—
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|
Virginia
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7
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|
|
1
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|
|
—
|
|
|
—
|
|
Washington
|
|
2
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|
|
—
|
|
|
—
|
|
|
—
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|
West Virginia
|
|
1
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|
|
1
|
|
|
—
|
|
|
—
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|
Wisconsin
|
|
1
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|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
159
|
|
|
23
|
|
|
28
|
|
|
1
|
|
|
|
|
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(1)
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The leases, with respect to these funeral homes, generally have remaining terms ranging from one to fifteen 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.
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Year Ended December 31,
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|||||||
|
2016
|
|
|
2017
|
|
|
2018
|
|
Funeral homes at beginning of period
|
167
|
|
|
170
|
|
|
178
|
|
Acquisitions
|
6
|
|
|
7
|
|
|
4
|
|
Constructed funeral homes
|
—
|
|
|
2
|
|
|
—
|
|
Divestitures
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
Mergers and relocation of funeral homes
|
(2
|
)
|
|
—
|
|
|
—
|
|
Funeral homes at end of period
|
170
|
|
|
178
|
|
|
182
|
|
|
|
|
|
|
|
|||
Cemeteries at beginning of period
|
32
|
|
|
32
|
|
|
32
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
Divestitures
|
—
|
|
|
—
|
|
|
(3
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)
|
Cemeteries at end of period
|
32
|
|
|
32
|
|
|
29
|
|
ITEM 3.
|
LEGAL PROCEEDINGS.
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ITEM 4.
|
MINE SAFETY DISCLOSURES.
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Dollar Value of Shares That May Yet Be Purchased Under the Program
(1)
|
||||||
|
|
|
|
|
|
|
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|
||||||
October 1, 2018 - October 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
26,019,052
|
|
November 1, 2018 - November 30, 2018
|
|
411,227
|
|
|
$
|
16.65
|
|
|
411,227
|
|
|
$
|
19,170,594
|
|
December 1, 2018 - December 31, 2018
|
|
690,742
|
|
|
$
|
15.65
|
|
|
690,742
|
|
|
$
|
8,357,192
|
|
Total for quarter ended December 31, 2018
|
|
1,101,969
|
|
|
|
|
1,101,969
|
|
|
|
|
|
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(1)
|
See the first paragraph under the caption
“–
Purchases of Equity Securities by the Issuer
”
for more information on our publicly announced share repurchase program.
|
|
12/13
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
||||||||||||
Carriage Services, Inc.
|
$
|
100.00
|
|
|
$
|
107.86
|
|
|
$
|
124.61
|
|
|
$
|
149.04
|
|
|
$
|
134.97
|
|
|
$
|
82.47
|
|
Russell 3000
|
100.00
|
|
|
112.55
|
|
|
113.09
|
|
|
127.47
|
|
|
154.40
|
|
|
146.29
|
|
||||||
Peer Group
|
100.00
|
|
|
125.26
|
|
|
145.13
|
|
|
148.16
|
|
|
210.39
|
|
|
234.10
|
|
|
|
|
|
|
(1)
|
Fiscal year ending December 31. $100 invested on December 31, 2013 in stock or index, including reinvestment of dividends. Peer Group includes SCI and StoneMor. The stock price performance included in this graph is not necessarily indicative of future stock price performance.
|
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
|
Year ended December 31,
|
||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||||||||
INCOME STATEMENT DATA:
|
|
||||||||||||||||||
Revenue
|
$
|
226,124
|
|
|
$
|
242,502
|
|
|
$
|
248,200
|
|
|
$
|
258,139
|
|
|
$
|
267,992
|
|
Gross profit
|
70,008
|
|
|
77,508
|
|
|
79,650
|
|
|
76,799
|
|
|
75,947
|
|
|||||
Operating income
|
39,715
|
|
|
48,648
|
|
|
50,204
|
|
|
48,941
|
|
|
43,307
|
|
|||||
Income before income taxes
|
22,701
|
|
|
34,590
|
|
|
32,241
|
|
|
32,782
|
|
|
18,266
|
|
|||||
Net income attributable to common shareholders
|
15,838
|
|
|
20,853
|
|
|
19,581
|
|
|
37,193
|
|
|
11,645
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share
|
$
|
0.86
|
|
|
$
|
1.16
|
|
|
$
|
1.18
|
|
|
$
|
2.25
|
|
|
$
|
0.64
|
|
Diluted earnings per share
|
$
|
0.85
|
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
$
|
0.63
|
|
Dividends declared per share
|
$
|
0.100
|
|
|
$
|
0.100
|
|
|
$
|
0.150
|
|
|
$
|
0.225
|
|
|
$
|
0.300
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
18,108
|
|
|
17,791
|
|
|
16,515
|
|
|
16,438
|
|
|
17,971
|
|
|||||
Diluted
|
18,257
|
|
|
18,317
|
|
|
17,460
|
|
|
17,715
|
|
|
18,374
|
|
|||||
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
827,528
|
|
|
$
|
833,139
|
|
|
$
|
885,069
|
|
|
$
|
921,533
|
|
|
$
|
917,502
|
|
Long-term debt and credit facility, net of current maturities
|
152,387
|
|
|
195,009
|
|
|
204,404
|
|
|
212,154
|
|
|
33,070
|
|
|||||
Convertible subordinated notes
|
114,542
|
|
|
115,227
|
|
|
119,596
|
|
|
124,441
|
|
|
5,732
|
|
|||||
Stockholders’ equity
|
179,875
|
|
|
157,594
|
|
|
175,734
|
|
|
197,656
|
|
|
221,492
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
|
2016
|
|
2017
|
|
2018
|
||||||
Cash at beginning of year
|
$
|
535
|
|
|
$
|
3,286
|
|
|
$
|
952
|
|
|
|
|
|
|
|
||||||
Cash flow from operating activities
|
50,035
|
|
|
45,230
|
|
|
48,994
|
|
|||
|
|
|
|
|
|
||||||
Acquisitions and land for new construction
|
(26,556
|
)
|
|
(28,799
|
)
|
|
(37,970
|
)
|
|||
Purchase of land and buildings previously leased
|
(6,258
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from the sale of businesses and other assets
|
4,385
|
|
|
5,731
|
|
|
—
|
|
|||
Growth capital expenditures
|
(9,444
|
)
|
|
(7,973
|
)
|
|
(4,260
|
)
|
|||
Maintenance capital expenditures
|
(7,402
|
)
|
|
(8,422
|
)
|
|
(9,266
|
)
|
|||
Cash flow from investing activities
|
(45,275
|
)
|
|
(39,463
|
)
|
|
(51,496
|
)
|
|||
|
|
|
|
|
|
||||||
Net borrowings (payments) on long-term debt obligations
|
1,124
|
|
|
11,088
|
|
|
(194,340
|
)
|
|||
Payment of debt issuance costs related to long-term debt
|
—
|
|
|
—
|
|
|
(1,751
|
)
|
|||
Acquisition of Convertible Notes
|
—
|
|
|
—
|
|
|
(98,266
|
)
|
|||
Transaction costs related to the acquisition of Convertible Notes
|
—
|
|
|
—
|
|
|
(885
|
)
|
|||
Proceeds from the issuance of the Senior Notes
|
—
|
|
|
—
|
|
|
320,125
|
|
|||
Payment of debt issuance costs related to the Senior Notes
|
—
|
|
|
—
|
|
|
(1,367
|
)
|
|||
Dividends paid on common stock
|
(2,492
|
)
|
|
(3,709
|
)
|
|
(5,513
|
)
|
|||
Net proceeds from employee equity plans
|
—
|
|
|
886
|
|
|
457
|
|
|||
Purchase of treasury stock
|
—
|
|
|
(16,366
|
)
|
|
(16,266
|
)
|
|||
Payment of loan origination costs related to the Former Credit Agreement
|
(717
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing costs
|
76
|
|
|
—
|
|
|
—
|
|
|||
Cash flow from financing activities
|
(2,009
|
)
|
|
(8,101
|
)
|
|
2,194
|
|
|||
|
|
|
|
|
|
||||||
Cash at end of year
|
$
|
3,286
|
|
|
$
|
952
|
|
|
$
|
644
|
|
|
2016
|
|
2017
|
|
2018
|
||||||
Growth
|
|
|
|
|
|
||||||
Cemetery development
|
$
|
4.0
|
|
|
$
|
3.7
|
|
|
$
|
3.1
|
|
Construction for new funeral facilities
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|||
Renovations at certain businesses
|
2.3
|
|
|
1.2
|
|
|
1.1
|
|
|||
Total Growth
|
$
|
9.4
|
|
|
$
|
8.0
|
|
|
$
|
4.2
|
|
|
2016
|
|
2017
|
|
2018
|
||||||
Maintenance
|
|
|
|
|
|
||||||
Facility repairs and improvements
|
$
|
2.4
|
|
|
$
|
2.2
|
|
|
$
|
2.6
|
|
General equipment and furniture
|
2.1
|
|
|
2.0
|
|
|
2.2
|
|
|||
Vehicles
|
1.5
|
|
|
1.9
|
|
|
2.6
|
|
|||
Paving roads and parking lots
|
0.7
|
|
|
1.3
|
|
|
0.7
|
|
|||
Information technology infrastructure improvements
|
0.7
|
|
|
1.0
|
|
|
1.2
|
|
|||
Total Maintenance
|
$
|
7.4
|
|
|
$
|
8.4
|
|
|
$
|
9.3
|
|
2018
|
Per Share
|
|
Dollar Value
|
||||
March 1st
|
$
|
0.075
|
|
|
$
|
1.2
|
|
June 1st
|
$
|
0.075
|
|
|
$
|
1.4
|
|
September 1st
|
$
|
0.075
|
|
|
$
|
1.4
|
|
December 1st
|
$
|
0.075
|
|
|
$
|
1.4
|
|
|
|
|
|
||||
2017
|
Per Share
|
|
Dollar Value
|
||||
March 1st
|
$
|
0.050
|
|
|
$
|
0.8
|
|
June 1st
|
$
|
0.050
|
|
|
$
|
0.8
|
|
September 1st
|
$
|
0.050
|
|
|
$
|
0.8
|
|
December 1st
|
$
|
0.075
|
|
|
$
|
1.2
|
|
|
|
|
|
||||
2016
|
Per Share
|
|
Dollar Value
|
||||
March 1st
|
$
|
0.025
|
|
|
$
|
0.4
|
|
June 1st
|
$
|
0.025
|
|
|
$
|
0.4
|
|
September 1st
|
$
|
0.050
|
|
|
$
|
0.8
|
|
December 1st
|
$
|
0.050
|
|
|
$
|
0.8
|
|
|
|
|
Payments Due By Period (in millions)
|
||||||||||||||||||||||||||
|
Financial Note
Reference
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
After
5 Years
|
||||||||||||||
Long-term debt obligations
|
14
|
|
$
|
36.0
|
|
|
$
|
2.0
|
|
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
$
|
0.6
|
|
|
$
|
27.7
|
|
|
$
|
3.4
|
|
Interest obligation on long-term debt
(a)
|
14
|
|
5.9
|
|
|
1.2
|
|
|
1.0
|
|
|
0.9
|
|
|
0.8
|
|
|
0.4
|
|
|
1.6
|
|
|||||||
Capital lease obligations, including interest
|
17
|
|
11.3
|
|
|
0.9
|
|
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
0.9
|
|
|
7.1
|
|
|||||||
Senior Notes
(b)
|
16
|
|
325.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325.0
|
|
|||||||
Convertible Notes
(c)
|
15
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Interest on Senior Notes
|
16
|
|
159.7
|
|
|
21.5
|
|
|
21.5
|
|
|
21.6
|
|
|
21.6
|
|
|
21.5
|
|
|
52.0
|
|
|||||||
Interest on Convertible Notes
|
15
|
|
0.4
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations
|
17
|
|
11.5
|
|
|
3.7
|
|
|
3.2
|
|
|
2.7
|
|
|
0.5
|
|
|
0.3
|
|
|
1.1
|
|
|||||||
Total contractual obligations
|
|
|
$
|
556.1
|
|
|
$
|
29.5
|
|
|
$
|
28.0
|
|
|
$
|
33.3
|
|
|
$
|
24.3
|
|
|
$
|
50.8
|
|
|
$
|
390.2
|
|
|
|
|
(a)
|
Based on interest rates in effect at December 31, 2018.
|
|
(b)
|
Matures in 2026.
|
|
(c)
|
Matures in 2021.
|
|
|
|
|
Payments Due By Period (in millions)
|
||||||||||||||||||||||||||
|
Financial Note
Reference
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
After
5 Years |
||||||||||||||
Non-compete agreements
|
17
|
|
$
|
8.1
|
|
|
$
|
1.9
|
|
|
$
|
1.6
|
|
|
$
|
1.5
|
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
|
$
|
1.3
|
|
Consulting agreements
|
17
|
|
2.8
|
|
|
0.9
|
|
|
0.7
|
|
|
0.6
|
|
|
0.4
|
|
|
0.2
|
|
|
—
|
|
|||||||
Employment agreements
(a)
|
17
|
|
5.7
|
|
|
1.9
|
|
|
1.2
|
|
|
0.9
|
|
|
0.8
|
|
|
0.7
|
|
|
0.2
|
|
|||||||
Total contractual cash obligations
|
|
|
$
|
16.6
|
|
|
$
|
4.7
|
|
|
$
|
3.5
|
|
|
$
|
3.0
|
|
|
$
|
2.3
|
|
|
$
|
1.6
|
|
|
$
|
1.5
|
|
|
|
|
(a)
|
Melvin C. Payne, our Chairman of the Board and Chief Executive Officer, has an employment agreement that does not renew after the initial term of five years.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
|
2017
|
|
|
2018
|
|
|||
Revenue
|
$
|
248,200
|
|
|
$
|
258,139
|
|
|
$
|
267,992
|
|
Funeral contracts
|
33,160
|
|
|
34,894
|
|
|
36,816
|
|
|||
Average revenue per contract
|
$
|
5,642
|
|
|
$
|
5,705
|
|
|
$
|
5,674
|
|
Preneed interment rights (property) sold
|
7,606
|
|
|
6,959
|
|
|
7,063
|
|
|||
Average price per interment right sold
|
$
|
3,172
|
|
|
$
|
3,294
|
|
|
$
|
3,472
|
|
Gross profit
|
$
|
79,650
|
|
|
$
|
76,799
|
|
|
$
|
75,947
|
|
Net income
|
$
|
19,581
|
|
|
$
|
37,193
|
|
|
$
|
11,645
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|||
Net income
|
$
|
19,581
|
|
|
$
|
37,193
|
|
|
$
|
11,645
|
|
Special items, net of tax except for items noted by**
(1)
|
|
|
|
|
|
||||||
Acquisition and divestiture expenses
|
456
|
|
|
—
|
|
|
—
|
|
|||
Severance and retirement costs
|
2,587
|
|
|
—
|
|
|
1,134
|
|
|||
Performance Awards cancellation write-off
|
—
|
|
|
—
|
|
|
2,594
|
|
|||
Consulting fees
|
323
|
|
|
—
|
|
|
—
|
|
|||
Accretion of discount on Convertible Notes**
|
3,870
|
|
|
4,329
|
|
|
2,192
|
|
|||
Net Loss on early extinguishment of debt
|
369
|
|
|
—
|
|
|
397
|
|
|||
Loss on sale of business and other costs
|
1,152
|
|
|
—
|
|
|
439
|
|
|||
Goodwill and other impairments
|
—
|
|
|
—
|
|
|
805
|
|
|||
Litigation reserve
|
—
|
|
|
—
|
|
|
790
|
|
|||
Natural disaster costs
|
—
|
|
|
403
|
|
|
345
|
|
|||
Tax adjustment related to certain discrete items**
|
—
|
|
|
(17,176
|
)
|
|
1,225
|
|
|||
Adjusted net income
(2)
|
$
|
28,338
|
|
|
$
|
24,749
|
|
|
$
|
21,566
|
|
|
|
|
|
|
(1)
|
Special items are defined as charges or credits included in our GAAP financial statements that can vary from period to period and are not reflective of costs incurred in the ordinary course of our operations. Special Items are taxed at the federal statutory rate of 35 percent for both years ended December 31, 2016 and 2017 and 21 percent for the year ended December 31, 2018 except for the Accretion of the discount on the Convertible Notes and the Tax adjustment related to certain discrete items, as these are non-tax deductible items.
|
|||
(2)
|
Adjusted net income is defined as Net income plus adjustments for Special items and other expenses or gains that we believe do not directly reflect our core operations and may not be indicative of our normal business operations.
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|||
Gross profit
|
$
|
79,650
|
|
|
$
|
76,799
|
|
|
$
|
75,947
|
|
|
|
|
|
|
|
||||||
Cemetery property amortization
|
3,904
|
|
|
3,350
|
|
|
3,602
|
|
|||
Field depreciation expense
|
10,015
|
|
|
11,024
|
|
|
12,015
|
|
|||
Regional and unallocated funeral and cemetery costs
|
10,844
|
|
|
13,339
|
|
|
12,749
|
|
|||
Operating profit
(1)
|
$
|
104,413
|
|
|
$
|
104,512
|
|
|
$
|
104,313
|
|
|
|
|
|
|
(1)
|
Operating profit is defined as Gross profit less Cemetery property amortization, Field depreciation expense and Regional and unallocated funeral and cemetery costs.
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|||
Funeral Home
|
$
|
79,183
|
|
|
$
|
81,981
|
|
|
$
|
82,154
|
|
Cemetery
|
25,230
|
|
|
22,531
|
|
|
22,159
|
|
|||
Operating profit
|
$
|
104,413
|
|
|
$
|
104,512
|
|
|
$
|
104,313
|
|
|
|
|
|
|
|
||||||
Operating profit margin
(1)
|
42.1
|
%
|
|
40.5
|
%
|
|
38.9
|
%
|
|
|
|
|
|
(1)
|
Operating profit margin is defined as Operating profit as a percentage of Revenue.
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
|
2018
|
|
||
Revenue:
|
|
|
|
||||
Same store operating revenue
|
$
|
161,690
|
|
|
$
|
160,459
|
|
Acquired operating revenue
|
30,108
|
|
|
41,447
|
|
||
Divested revenue
|
606
|
|
|
—
|
|
||
Preneed funeral insurance commissions
|
1,254
|
|
|
1,294
|
|
||
Preneed funeral trust earnings
|
7,228
|
|
|
7,525
|
|
||
Total
|
$
|
200,886
|
|
|
$
|
210,725
|
|
|
|
|
|
||||
Operating profit:
|
|
|
|
||||
Same store operating profit
|
$
|
62,361
|
|
|
$
|
58,976
|
|
Acquired operating profit
|
11,770
|
|
|
15,397
|
|
||
Divested operating profit (loss)
|
302
|
|
|
(3
|
)
|
||
Preneed funeral insurance commissions
|
436
|
|
|
415
|
|
||
Preneed funeral trust earnings
|
7,112
|
|
|
7,369
|
|
||
Total
|
$
|
81,981
|
|
|
$
|
82,154
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
|
2018
|
|
||
Same store:
|
|
|
|
||||
Contract volume
|
30,162
|
|
|
30,088
|
|
||
Average revenue per contract, excluding preneed funeral trust earnings
|
$
|
5,361
|
|
|
$
|
5,333
|
|
Average revenue per contract, including preneed funeral trust earnings
|
$
|
5,559
|
|
|
$
|
5,542
|
|
Burial rate
|
40.6
|
%
|
|
39.6
|
%
|
||
Cremation rate
|
52.2
|
%
|
|
52.9
|
%
|
||
|
|
|
|
||||
Acquired:
|
|
|
|
||||
Contract volume
|
4,680
|
|
|
6,728
|
|
||
Average revenue per contract, excluding preneed funeral trust earnings
|
$
|
6,433
|
|
|
$
|
6,160
|
|
Average revenue per contract, including preneed funeral trust earnings
|
$
|
6,581
|
|
|
$
|
6,265
|
|
Burial rate
|
44.7
|
%
|
|
42.5
|
%
|
||
Cremation rate
|
46.5
|
%
|
|
49.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
|
2018
|
|
||
Revenue:
|
|
|
|
||||
Same store operating revenue
|
$
|
40,047
|
|
|
$
|
41,740
|
|
Acquired operating revenue
|
3,195
|
|
|
3,395
|
|
||
Divested revenue
|
6,173
|
|
|
4,712
|
|
||
Preneed cemetery trust earnings
|
6,300
|
|
|
5,761
|
|
||
Preneed cemetery finance charges
|
1,538
|
|
|
1,659
|
|
||
Total
|
$
|
57,253
|
|
|
$
|
57,267
|
|
|
|
|
|
||||
Operating profit:
|
|
|
|
||||
Same store operating profit
|
$
|
12,368
|
|
|
$
|
12,733
|
|
Acquired operating profit
|
1,038
|
|
|
1,147
|
|
||
Divested operating profit
|
1,675
|
|
|
1,376
|
|
||
Preneed cemetery trust earnings
|
5,912
|
|
|
5,244
|
|
||
Preneed cemetery finance charges
|
1,538
|
|
|
1,659
|
|
||
Total
|
$
|
22,531
|
|
|
$
|
22,159
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
|
2018
|
|
||
Same store:
|
|
|
|
||||
Preneed revenue as a percentage of operating revenue
|
57
|
%
|
|
58
|
%
|
||
Preneed revenue
|
$
|
22,608
|
|
|
$
|
24,374
|
|
Number of preneed internment rights sold
|
5,673
|
|
|
5,991
|
|
||
Atneed revenue
|
$
|
17,439
|
|
|
$
|
17,366
|
|
|
|
|
|
||||
Acquired:
|
|
|
|
||||
Preneed revenue as a percentage of operating revenue
|
65
|
%
|
|
60
|
%
|
||
Preneed revenue
|
$
|
2,076
|
|
|
$
|
2,034
|
|
Number of preneed internment rights sold
|
523
|
|
|
484
|
|
||
Atneed revenue
|
$
|
1,119
|
|
|
$
|
1,361
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
|
2017
|
|
||
Revenue:
|
|
|
|
||||
Same store operating revenue
|
$
|
155,710
|
|
|
$
|
158,106
|
|
Acquired operating revenue
|
24,914
|
|
|
34,294
|
|
||
Preneed funeral insurance commissions
|
1,429
|
|
|
1,254
|
|
||
Preneed funeral trust earnings
|
7,348
|
|
|
7,232
|
|
||
Total
|
$
|
189,401
|
|
|
$
|
200,886
|
|
|
|
|
|
||||
Operating profit:
|
|
|
|
||||
Same store operating profit
|
$
|
60,823
|
|
|
$
|
60,864
|
|
Acquired operating profit
|
10,419
|
|
|
13,565
|
|
||
Preneed funeral insurance commissions
|
682
|
|
|
436
|
|
||
Preneed funeral trust earnings
|
7,259
|
|
|
7,116
|
|
||
Total
|
$
|
79,183
|
|
|
$
|
81,981
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
|
2017
|
|
||
Same store:
|
|
|
|
||||
Contract volume
|
29,274
|
|
|
29,587
|
|
||
Average revenue per contract, excluding preneed funeral trust earnings
|
$
|
5,319
|
|
|
$
|
5,344
|
|
Average revenue per contract, including preneed funeral trust earnings
|
$
|
5,512
|
|
|
$
|
5,535
|
|
Burial rate
|
41.2
|
%
|
|
40.3
|
%
|
||
Cremation rate
|
51.5
|
%
|
|
52.5
|
%
|
||
|
|
|
|
||||
Acquired:
|
|
|
|
||||
Contract volume
|
3,886
|
|
|
5,307
|
|
||
Average revenue per contract, excluding preneed funeral trust earnings
|
$
|
6,411
|
|
|
$
|
6,462
|
|
Average revenue per contract, including preneed funeral trust earnings
|
$
|
6,628
|
|
|
$
|
6,654
|
|
Burial rate
|
46.9
|
%
|
|
46.5
|
%
|
||
Cremation rate
|
44.7
|
%
|
|
45.1
|
%
|
||
|
|
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
|
2017
|
|
||
Revenue:
|
|
|
|
||||
Same store operating revenue
|
$
|
45,893
|
|
|
$
|
45,044
|
|
Acquired operating revenue
|
3,054
|
|
|
3,194
|
|
||
Preneed cemetery trust earnings
|
8,004
|
|
|
7,193
|
|
||
Preneed cemetery finance charges
|
1,848
|
|
|
1,822
|
|
||
Total
|
$
|
58,799
|
|
|
$
|
57,253
|
|
|
|
|
|
||||
Operating profit:
|
|
|
|
||||
Same store operating profit
|
$
|
14,613
|
|
|
$
|
12,864
|
|
Acquired operating profit
|
1,054
|
|
|
1,039
|
|
||
Preneed cemetery trust earnings
|
7,715
|
|
|
6,806
|
|
||
Preneed cemetery finance charges
|
1,848
|
|
|
1,822
|
|
||
Total
|
$
|
25,230
|
|
|
$
|
22,531
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
|
2017
|
|
||
Same store:
|
|
|
|
||||
Preneed revenue as a percentage of operating revenue
|
60
|
%
|
|
55
|
%
|
||
Preneed revenue
|
$
|
27,316
|
|
|
$
|
24,960
|
|
Number of preneed internment rights sold
|
7,074
|
|
|
6,436
|
|
||
Atneed revenue
|
$
|
18,577
|
|
|
$
|
20,084
|
|
|
|
|
|
||||
Acquired:
|
|
|
|
||||
Preneed revenue as a percentage of operating revenue
|
66
|
%
|
|
65
|
%
|
||
Preneed revenue
|
$
|
2,013
|
|
|
$
|
2,073
|
|
Number of preneed internment rights sold
|
532
|
|
|
523
|
|
||
Atneed revenue
|
$
|
1,041
|
|
|
$
|
1,121
|
|
|
|
December 31, 2017
|
|||
|
|
% Change
|
|||
Increase in Deferred tax liability
|
$
|
2,255
|
|
7.8
|
%
|
Increase in Total liabilities
|
$
|
2,255
|
|
0.3
|
%
|
Decrease in Retained earnings
|
$
|
2,255
|
|
3.7
|
%
|
Decrease in Total stockholders' equity
|
$
|
2,255
|
|
1.1
|
%
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
|
Page
|
CONSOLIDATED FINANCIAL STATEMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
952
|
|
|
$
|
644
|
|
Accounts receivable, net of allowance for bad debts of $835 in 2017 and $769 in 2018
|
19,655
|
|
|
18,897
|
|
||
Inventories
|
6,519
|
|
|
6,751
|
|
||
Prepaid expenses
|
2,028
|
|
|
1,456
|
|
||
Other current assets
|
986
|
|
|
1,555
|
|
||
Total current assets
|
30,140
|
|
|
29,303
|
|
||
Preneed cemetery trust investments
|
73,853
|
|
|
62,432
|
|
||
Preneed funeral trust investments
|
90,682
|
|
|
82,074
|
|
||
Preneed receivables, net of allowance for bad debts of $2,278 in 2017 and $2,151 in 2018
|
31,644
|
|
|
18,441
|
|
||
Receivables from preneed trusts
|
15,287
|
|
|
17,073
|
|
||
Property, plant and equipment, net of accumulated depreciation of $115,776 in 2017 and $124,945 in 2018
|
247,294
|
|
|
260,838
|
|
||
Cemetery property, net of accumulated amortization of $37,543 in 2017 and $37,668 in 2018
|
76,331
|
|
|
74,958
|
|
||
Goodwill
|
287,956
|
|
|
303,887
|
|
||
Intangible and other non-current assets
|
18,117
|
|
|
24,425
|
|
||
Cemetery perpetual care trust investments
|
50,229
|
|
|
44,071
|
|
||
Total assets
|
$
|
921,533
|
|
|
$
|
917,502
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt and capital lease obligations
|
$
|
17,251
|
|
|
$
|
2,327
|
|
Accounts payable
|
6,547
|
|
|
9,987
|
|
||
Other liabilities
|
1,361
|
|
|
1,236
|
|
||
Accrued liabilities
|
17,559
|
|
|
21,408
|
|
||
Total current liabilities
|
42,718
|
|
|
34,958
|
|
||
Long-term debt, net of current portion
|
121,034
|
|
|
6,925
|
|
||
Credit facility
|
91,120
|
|
|
26,145
|
|
||
Convertible subordinated notes due 2021
|
124,441
|
|
|
5,732
|
|
||
Senior notes due 2026
|
—
|
|
|
319,108
|
|
||
Obligations under capital leases, net of current portion
|
6,361
|
|
|
6,143
|
|
||
Deferred preneed cemetery revenue
|
54,690
|
|
|
45,997
|
|
||
Deferred preneed funeral revenue
|
34,585
|
|
|
28,606
|
|
||
Deferred tax liability
|
31,159
|
|
|
31,263
|
|
||
Other long-term liabilities
|
3,378
|
|
|
3,133
|
|
||
Deferred preneed cemetery receipts held in trust
|
73,853
|
|
|
62,432
|
|
||
Deferred preneed funeral receipts held in trust
|
90,682
|
|
|
82,074
|
|
||
Care trusts’ corpus
|
49,856
|
|
|
43,494
|
|
||
Total liabilities
|
723,877
|
|
|
696,010
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value; 80,000,000 shares authorized; 22,622,242 and 25,703,490 issued as of December 31, 2017 and 2018, respectively
|
226
|
|
|
257
|
|
||
Additional paid-in capital
|
216,158
|
|
|
243,849
|
|
||
Retained earnings
|
57,904
|
|
|
71,680
|
|
||
Treasury stock, at cost; 6,523,370 and 7,625,339 shares at December 31, 2017 and 2018, respectively
|
(76,632
|
)
|
|
(94,294
|
)
|
||
Total stockholders’ equity
|
197,656
|
|
|
221,492
|
|
||
Total liabilities and stockholders’ equity
|
$
|
921,533
|
|
|
$
|
917,502
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Service revenue
|
$
|
124,361
|
|
|
$
|
132,592
|
|
|
$
|
138,604
|
|
Property and merchandise revenue
|
105,210
|
|
|
108,046
|
|
|
112,253
|
|
|||
Other revenue
|
18,629
|
|
|
17,501
|
|
|
17,135
|
|
|||
|
248,200
|
|
|
258,139
|
|
|
267,992
|
|
|||
Field costs and expenses:
|
|
|
|
|
|
||||||
Cost of service
|
61,586
|
|
|
66,884
|
|
|
72,123
|
|
|||
Cost of merchandise
|
81,079
|
|
|
85,422
|
|
|
90,008
|
|
|||
Cemetery property amortization
|
3,905
|
|
|
3,350
|
|
|
3,602
|
|
|||
Field depreciation expense
|
10,014
|
|
|
11,024
|
|
|
12,015
|
|
|||
Regional and unallocated funeral and cemetery costs
|
10,844
|
|
|
13,339
|
|
|
12,749
|
|
|||
Other expenses
|
1,122
|
|
|
1,321
|
|
|
1,548
|
|
|||
|
168,550
|
|
|
181,340
|
|
|
192,045
|
|
|||
Gross profit
|
79,650
|
|
|
76,799
|
|
|
75,947
|
|
|||
Corporate costs and expenses:
|
|
|
|
|
|
||||||
General, administrative and other
|
27,944
|
|
|
26,253
|
|
|
30,827
|
|
|||
Home office depreciation and amortization
|
1,502
|
|
|
1,605
|
|
|
1,813
|
|
|||
|
29,446
|
|
|
27,858
|
|
|
32,640
|
|
|||
Operating income
|
50,204
|
|
|
48,941
|
|
|
43,307
|
|
|||
Interest expense
|
(11,738
|
)
|
|
(12,948
|
)
|
|
(21,109
|
)
|
|||
Accretion of discount on 2.75% convertible subordinated notes
|
(3,870
|
)
|
|
(4,329
|
)
|
|
(2,192
|
)
|
|||
Loss on early extinguishment of debt
|
(567
|
)
|
|
—
|
|
|
(502
|
)
|
|||
Other, net
|
(1,788
|
)
|
|
1,118
|
|
|
(1,238
|
)
|
|||
Income before income taxes
|
32,241
|
|
|
32,782
|
|
|
18,266
|
|
|||
Provision for income taxes
|
(12,682
|
)
|
|
(13,100
|
)
|
|
(5,754
|
)
|
|||
Tax adjustment related to certain discrete items
|
22
|
|
|
17,511
|
|
|
(867
|
)
|
|||
Total (provision) benefit for income taxes
|
$
|
(12,660
|
)
|
|
$
|
4,411
|
|
|
$
|
(6,621
|
)
|
Net income
|
$
|
19,581
|
|
|
$
|
37,193
|
|
|
$
|
11,645
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
$
|
1.18
|
|
|
$
|
2.25
|
|
|
$
|
0.64
|
|
Diluted earnings per common share
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
0.15
|
|
|
$
|
0.225
|
|
|
$
|
0.30
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
16,515
|
|
|
16,438
|
|
|
17,971
|
|
|||
Diluted
|
17,460
|
|
|
17,715
|
|
|
18,374
|
|
|
Shares
Outstanding
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Total
|
|||||||||||
Balance – December 31, 2015
|
16,648
|
|
|
$
|
225
|
|
|
$
|
214,250
|
|
|
$
|
1,130
|
|
|
$
|
(60,266
|
)
|
|
$
|
155,339
|
|
Net Income – 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
19,581
|
|
|
—
|
|
|
19,581
|
|
|||||
Issuance of common stock
|
45
|
|
|
—
|
|
|
872
|
|
|
—
|
|
|
—
|
|
|
872
|
|
|||||
Exercise of stock options
|
48
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Issuance of restricted common stock
|
18
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Cancellation and retirement of restricted common stock and stock options
|
(118
|
)
|
|
(1
|
)
|
|
(888
|
)
|
|
—
|
|
|
—
|
|
|
(889
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,526
|
|
|
—
|
|
|
—
|
|
|
3,526
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(2,492
|
)
|
|
—
|
|
|
—
|
|
|
(2,492
|
)
|
|||||
Excess tax benefit on equity compensation
|
—
|
|
|
—
|
|
|
(216
|
)
|
|
—
|
|
|
—
|
|
|
(216
|
)
|
|||||
Balance – December 31, 2016
|
16,641
|
|
|
$
|
225
|
|
|
$
|
215,064
|
|
|
$
|
20,711
|
|
|
$
|
(60,266
|
)
|
|
$
|
175,734
|
|
Net Income – 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
37,193
|
|
|
—
|
|
|
37,193
|
|
|||||
Issuance of common stock
|
68
|
|
|
1
|
|
|
1,637
|
|
|
—
|
|
|
—
|
|
|
1,638
|
|
|||||
Exercise of stock options
|
61
|
|
|
—
|
|
|
514
|
|
|
—
|
|
|
—
|
|
|
514
|
|
|||||
Issuance of restricted common stock
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cancellation and retirement of restricted common stock and stock options
|
(25
|
)
|
|
—
|
|
|
(551
|
)
|
|
—
|
|
|
—
|
|
|
(551
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,203
|
|
|
—
|
|
|
—
|
|
|
3,203
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(3,709
|
)
|
|
—
|
|
|
—
|
|
|
(3,709
|
)
|
|||||
Treasury stock acquired
|
(674
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,366
|
)
|
|
(16,366
|
)
|
|||||
Balance – December 31, 2017
|
16,098
|
|
|
$
|
226
|
|
|
$
|
216,158
|
|
|
$
|
57,904
|
|
|
$
|
(76,632
|
)
|
|
$
|
197,656
|
|
Effect of adoption of topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
|||||
Balance – January 1, 2018
|
16,098
|
|
|
$
|
226
|
|
|
$
|
216,158
|
|
|
$
|
60,035
|
|
|
$
|
(76,632
|
)
|
|
$
|
199,787
|
|
Net Income – 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
11,645
|
|
|
—
|
|
|
11,645
|
|
|||||
Issuance of common stock
|
62
|
|
|
1
|
|
|
1,199
|
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|||||
Exercise of stock options
|
140
|
|
|
1
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||
Issuance of restricted common stock
|
87
|
|
|
1
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Cancellation and retirement of restricted common stock and stock options
|
(30
|
)
|
|
—
|
|
|
(398
|
)
|
|
—
|
|
|
—
|
|
|
(398
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
6,531
|
|
|
—
|
|
|
—
|
|
|
6,531
|
|
|||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
(5,514
|
)
|
|
—
|
|
|
—
|
|
|
(5,514
|
)
|
|||||
Convertible notes exchange
|
2,823
|
|
|
28
|
|
|
25,883
|
|
|
—
|
|
|
—
|
|
|
25,911
|
|
|||||
Treasury stock acquired
|
(1,102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,662
|
)
|
|
(17,662
|
)
|
|||||
Balance – December 31, 2018
|
18,078
|
|
|
$
|
257
|
|
|
$
|
243,849
|
|
|
$
|
71,680
|
|
|
$
|
(94,294
|
)
|
|
$
|
221,492
|
|
|
For the Years Ended December 31,
|
|||||||||||
|
2016
|
|
2017
|
|
2018
|
|||||||
Cash flows from operating activities:
|
|
|
|
|
|
|||||||
Net income
|
$
|
19,581
|
|
|
$
|
37,193
|
|
|
$
|
11,645
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
15,421
|
|
|
15,979
|
|
|
17,430
|
|
||||
Provision for losses on accounts receivable
|
2,098
|
|
|
2,198
|
|
|
1,841
|
|
||||
Stock-based compensation expense
|
3,229
|
|
|
3,162
|
|
|
6,583
|
|
||||
Deferred income tax expense (benefit)
|
4,855
|
|
|
(11,651
|
)
|
|
3,823
|
|
||||
Amortization of deferred financing costs
|
824
|
|
|
820
|
|
|
532
|
|
||||
Amortization of capitalized commissions on preneed contracts
|
—
|
|
—
|
|
—
|
|
|
599
|
|
|||
Accretion of discount on 2.75% convertible subordinated notes
|
3,870
|
|
|
4,329
|
|
|
2,192
|
|
||||
Accretion of discount on 6.625% senior notes
|
—
|
|
|
—
|
|
|
272
|
|
||||
Net loss on early extinguishment of debt
|
567
|
|
|
—
|
|
|
502
|
|
||||
Net loss (gain) on sale of businesses and disposal of other assets
|
2,077
|
|
|
(710
|
)
|
|
1,052
|
|
||||
Impairment of intangible and other assets
|
145
|
|
|
—
|
|
|
1,019
|
|
||||
Changes in operating assets and liabilities that provided (required) cash:
|
|
|
|
|
|
|||||||
Accounts and preneed receivables
|
(5,162
|
)
|
|
(4,254
|
)
|
|
(5,061
|
)
|
||||
Inventories and other current assets
|
1,995
|
|
|
1,446
|
|
|
(159
|
)
|
||||
Intangible and other non-current assets
|
(1,155
|
)
|
|
149
|
|
|
(390
|
)
|
||||
Preneed funeral and cemetery trust investments
|
(14,528
|
)
|
|
(10,008
|
)
|
|
24,401
|
|
||||
Accounts payable
|
2,112
|
|
|
(3,649
|
)
|
|
2,044
|
|
||||
Accrued and other liabilities
|
780
|
|
|
(385
|
)
|
|
3,990
|
|
||||
Deferred preneed funeral and cemetery revenue
|
(640
|
)
|
|
1,446
|
|
|
6,546
|
|
||||
Deferred preneed funeral and cemetery receipts held in trust
|
13,966
|
|
|
9,165
|
|
|
(29,867
|
)
|
||||
Net cash provided by operating activities
|
50,035
|
|
|
45,230
|
|
|
48,994
|
|
||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities:
|
|
|
|
|
|
|||||||
Acquisitions and land for new construction
|
(26,556
|
)
|
|
(28,799
|
)
|
|
(37,970
|
)
|
||||
Purchase of land and buildings previously leased
|
(6,258
|
)
|
|
—
|
|
|
—
|
|
||||
Net proceeds from sale of businesses and other assets
|
4,385
|
|
|
5,731
|
|
|
—
|
|
||||
Capital expenditures
|
(16,846
|
)
|
|
(16,395
|
)
|
|
(13,526
|
)
|
||||
Net cash used in investing activities
|
(45,275
|
)
|
|
(39,463
|
)
|
|
(51,496
|
)
|
||||
|
|
|
|
|
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|||||||
Payments against the term loan
|
(11,250
|
)
|
|
(11,250
|
)
|
|
(127,500
|
)
|
||||
Borrowings from the credit facility
|
71,200
|
|
|
106,900
|
|
|
124,500
|
|
||||
Payments against the credit facility
|
(96,100
|
)
|
|
(82,600
|
)
|
|
(189,400
|
)
|
||||
Borrowings from the term loan
|
39,063
|
|
|
—
|
|
|
—
|
|
||||
Payment of debt issuance costs related to the credit facility
|
—
|
|
|
—
|
|
|
(1,751
|
)
|
||||
Acquisition of 2.75% convertible subordinated notes
|
—
|
|
|
—
|
|
|
(98,266
|
)
|
||||
Transaction costs related to the acquisition of 2.75% convertible subordinated notes
|
—
|
|
|
—
|
|
|
(885
|
)
|
||||
Proceeds from the issuance of the 6.625% senior notes
|
—
|
|
|
—
|
|
|
320,125
|
|
||||
Payment of debt issuance costs related to the 6.625% senior notes
|
—
|
|
|
—
|
|
|
(1,367
|
)
|
||||
Payments on long-term debt and obligations under capital leases
|
(1,789
|
)
|
|
(1,962
|
)
|
|
(1,940
|
)
|
||||
Payments on contingent consideration recorded at acquisition date
|
—
|
|
|
(101
|
)
|
|
(138
|
)
|
||||
Proceeds from the exercise of stock options and employee stock purchase plan contributions
|
870
|
|
|
1,496
|
|
|
1,246
|
|
||||
Taxes paid on restricted stock vestings and exercises of non-qualified options
|
(578
|
)
|
|
(509
|
)
|
|
(651
|
)
|
||||
Dividends paid on common stock
|
(2,492
|
)
|
|
(3,709
|
)
|
|
(5,513
|
)
|
||||
Purchase of treasury stock
|
—
|
|
|
(16,366
|
)
|
|
(16,266
|
)
|
||||
Payment of loan origination costs related to the credit facility
|
(717
|
)
|
|
—
|
|
|
—
|
|
||||
Excess tax deficiency of equity compensation
|
(216
|
)
|
|
—
|
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
(2,009
|
)
|
|
(8,101
|
)
|
|
2,194
|
|
||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
2,751
|
|
|
(2,334
|
)
|
|
(308
|
)
|
||||
Cash and cash equivalents at beginning of year
|
535
|
|
|
3,286
|
|
|
952
|
|
||||
Cash and cash equivalents at end of year
|
$
|
3,286
|
|
|
$
|
952
|
|
|
$
|
644
|
|
•
|
we have the right to payment;
|
•
|
the customer has title to merchandise;
|
•
|
the deceased has used the merchandise or has been a part of the service; and
|
•
|
the customer directed the use of the merchandise or the plan of the service.
|
•
|
we have the right to payment;
|
•
|
the customer has title to merchandise;
|
•
|
the deceased has used the merchandise or has been a part of the service; and
|
•
|
the customer directed the use of the merchandise or the plan of the service.
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Funeral receivables, net of allowance for bad debt of $213 and $189, respectively
|
$
|
9,061
|
|
|
$
|
9,002
|
|
Cemetery receivables, net of allowance for bad debt of $622 and $580, respectively
|
10,331
|
|
|
9,688
|
|
||
Other receivables
|
263
|
|
|
207
|
|
||
Accounts receivable, net
|
$
|
19,655
|
|
|
$
|
18,897
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Funeral receivables, net of allowance for bad debt of $882
|
$
|
7,934
|
|
|
$
|
—
|
|
Cemetery receivables, net of allowance for bad debt of $1,396 and $1,228, respectively
|
23,710
|
|
|
18,441
|
|
||
Preneed receivables, net
|
$
|
31,644
|
|
|
$
|
18,441
|
|
|
Years
|
Buildings and improvements
|
15 to 40
|
Furniture and fixtures
|
5 to 10
|
Machinery and equipment
|
3 to 15
|
Automobiles
|
5 to 7
0
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Land
|
$
|
74,981
|
|
|
$
|
81,012
|
|
Buildings and improvements
|
211,934
|
|
|
223,646
|
|
||
Furniture, equipment and automobiles
|
76,155
|
|
|
81,125
|
|
||
Property, plant and equipment, at cost
|
363,070
|
|
|
385,783
|
|
||
Less: accumulated depreciation
|
(115,776
|
)
|
|
(124,945
|
)
|
||
Property, plant and equipment, net
|
$
|
247,294
|
|
|
$
|
260,838
|
|
|
|
December 31, 2017
|
|||
|
|
% Change
|
|||
Increase in Deferred tax liability
|
$
|
2,255
|
|
7.8
|
%
|
Increase in Total liabilities
|
$
|
2,255
|
|
0.3
|
%
|
Decrease in Retained earnings
|
$
|
2,255
|
|
3.7
|
%
|
Decrease in Total stockholders' equity
|
$
|
2,255
|
|
1.1
|
%
|
|
As of December 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance for bad debts
|
$
|
18,897
|
|
|
$
|
20,267
|
|
|
$
|
(1,370
|
)
|
Preneed receivables, net of allowance for bad debts
|
$
|
18,441
|
|
|
$
|
29,825
|
|
|
$
|
(11,384
|
)
|
Intangible and other non-current assets
|
$
|
2,717
|
|
|
$
|
—
|
|
|
$
|
2,717
|
|
Liabilities
|
|
|
|
|
|
||||||
Deferred preneed cemetery revenue, net
|
$
|
45,997
|
|
|
$
|
50,445
|
|
|
$
|
(4,448
|
)
|
Deferred preneed funeral revenue, net
|
$
|
28,606
|
|
|
$
|
36,912
|
|
|
$
|
(8,306
|
)
|
Deferred tax liability
|
$
|
31,263
|
|
|
$
|
30,635
|
|
|
$
|
628
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
71,680
|
|
|
$
|
69,591
|
|
|
$
|
2,089
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
As
Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
|
||||||
Field costs and expenses
|
$
|
192,045
|
|
|
$
|
191,984
|
|
|
$
|
61
|
|
Income before income taxes
|
$
|
18,266
|
|
|
$
|
18,327
|
|
|
$
|
(61
|
)
|
Net income
|
$
|
11,645
|
|
|
$
|
11,687
|
|
|
$
|
(42
|
)
|
|
|
|
|
|
|
||||||
Basic earnings per common share:
|
$
|
0.64
|
|
|
$
|
0.64
|
|
|
$
|
—
|
|
Diluted earnings per common share:
|
$
|
0.63
|
|
|
$
|
0.63
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Dividends declared per common share
|
$
|
0.300
|
|
|
$
|
0.300
|
|
|
$
|
—
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
As
Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of capitalized commissions on preneed contracts
|
$
|
723
|
|
|
$
|
—
|
|
|
$
|
723
|
|
Changes in operating assets and liabilities that provided (required) cash:
|
|
|
|
|
|
||||||
Intangible and other non-current assets
|
$
|
(662
|
)
|
|
$
|
—
|
|
|
$
|
(662
|
)
|
|
December 31, 2017
|
|
Effect of Adoption of
Topic 606 |
|
January 1, 2018
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance for bad debts
(1)
|
$
|
19,655
|
|
|
$
|
(1,399
|
)
|
|
$
|
18,256
|
|
Preneed receivables, net of allowance for bad debts
(2)(3)
|
$
|
31,644
|
|
|
$
|
(11,129
|
)
|
|
$
|
20,515
|
|
Intangible and other non-current assets
(4)
|
$
|
—
|
|
|
$
|
2,778
|
|
|
$
|
2,778
|
|
|
|
|
$
|
(9,750
|
)
|
|
|
||||
Liabilities
|
|
|
|
|
|
||||||
Deferred preneed cemetery revenue
(1)(2)
|
$
|
54,690
|
|
|
$
|
(4,594
|
)
|
|
$
|
50,096
|
|
Deferred preneed funeral revenue
(3)
|
$
|
34,585
|
|
|
$
|
(7,934
|
)
|
|
$
|
26,651
|
|
Deferred tax liability
(4)
|
$
|
31,159
|
|
|
$
|
647
|
|
|
$
|
31,806
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Retained earnings
(4)
|
$
|
57,904
|
|
|
$
|
2,131
|
|
|
$
|
60,035
|
|
|
|
|
$
|
(9,750
|
)
|
|
|
|
|
|
|
|
(1)
|
Under Topic 606, receivables represent an entity’s unconditional right to consideration, billed or unbilled. Our balance of accounts receivable, net of allowance for bad debts, of $19.7 million at December 31, 2017, included the current portion of receivables for preneed cemetery merchandise and service contracts totaling $1.4 million. As these amounts represent undelivered performance obligations, they have been reclassified to reduce deferred preneed cemetery revenue on January 1, 2018.
|
|||
(2)
|
Under Topic 606, receivables represent an entity’s unconditional right to consideration, billed or unbilled. Our balance of preneed receivables, net of allowance for bad debts, of $31.6 million at December 31, 2017, included the non-current portion of receivables for preneed cemetery merchandise and service contracts totaling $4.6 million. As these amounts represent undelivered performance obligations, they have been reclassified to reduce deferred preneed cemetery revenue on January 1, 2018.
|
|||
(3)
|
Under Topic 606, receivables represent an entity’s unconditional right to consideration, billed or unbilled. Our balance of preneed receivables, net of allowance for bad debts, $31.6 million at December 31, 2017, included the non-current portion of receivables for preneed funeral trust contracts totaling $7.9 million. As these amounts represent undelivered performance obligations, they have been reclassified to reduce deferred preneed funeral revenue on January 1, 2018.
|
|||
(4)
|
Under Topic 606, certain costs incurred to obtain or fulfill a contract with a customer are capitalized. Beginning January 1, 2018, we capitalize selling costs related to undelivered preneed cemetery merchandise and services and preneed funeral trust contracts. Previously, these costs were expensed in the period incurred. We recorded a cumulative adjustment of $2.1 million to our opening Retained earnings, which consisted of a $2.8 million adjustment to our Intangible and other non-current assets and a $0.6 million adjustment to our Deferred tax liability on our Consolidated Balance Sheet on January 1, 2018.
|
|
Purchase Price Allocation
|
||
Current assets
|
$
|
166
|
|
Property, plant & equipment
|
17,543
|
|
|
Goodwill
|
16,777
|
|
|
Intangible and other non-current assets
|
3,863
|
|
|
Assumed liabilities
|
(399
|
)
|
|
Purchase price
|
$
|
37,950
|
|
Acquisition Date
|
|
Type of Business
|
|
Market
|
|
Assets
Acquired
(Excluding
Goodwill)
|
|
Goodwill
Recorded
|
|
Liabilities
and Debt
Assumed
|
||||||
July 10, 2018
|
|
Two Funeral Homes
|
|
Fredericksburg/Stafford, VA
|
|
$
|
13.2
|
|
|
$
|
16.0
|
|
|
$
|
—
|
|
August 21, 2018
|
|
One Funeral Home
|
|
Cookeville, TN
|
|
$
|
2.5
|
|
|
$
|
0.5
|
|
|
$
|
(0.2
|
)
|
August 28, 2018
|
|
One Funeral Home
|
|
Knightdale, NC
|
|
$
|
5.9
|
|
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
Purchase Price Allocation
|
||
Current assets
|
$
|
180
|
|
Property, plant & equipment
|
12,195
|
|
|
Goodwill
|
12,469
|
|
|
Intangible and other non-current assets
|
3,309
|
|
|
Assumed liabilities
|
(63
|
)
|
|
Obligations under capital lease
|
(590
|
)
|
|
Purchase price
|
$
|
27,500
|
|
Acquisition Date
|
|
Type of Business
|
|
Market
|
|
Assets
Acquired
(Excluding
Goodwill)
|
|
Goodwill
Recorded
|
|
Liabilities
and Debt
Assumed
|
||||||
November 7, 2017
|
|
One Funeral Home
|
|
Longmont, CO
|
|
$
|
1.5
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
November 7, 2017
|
|
One Funeral Home
|
|
Loveland, CO
|
|
$
|
1.7
|
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
December 5, 2017
|
|
Five Funeral Homes
|
|
Long Island, NY
|
|
$
|
12.5
|
|
|
$
|
11.1
|
|
|
$
|
(0.6
|
)
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Goodwill at the beginning of year
|
$
|
275,487
|
|
|
$
|
287,956
|
|
Increase in goodwill related to acquisitions
|
12,469
|
|
|
16,777
|
|
||
Decrease in goodwill related to impairments
|
—
|
|
|
(846
|
)
|
||
Goodwill at the end of the year
|
$
|
287,956
|
|
|
$
|
303,887
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Revenue
|
$
|
744
|
|
|
$
|
605
|
|
|
$
|
4,712
|
|
|
|
|
|
|
|
||||||
Operating income
|
314
|
|
|
277
|
|
|
1,130
|
|
|||
Other, net
(1)
|
(29
|
)
|
|
191
|
|
|
(349
|
)
|
|||
Income tax provision
|
(112
|
)
|
|
(187
|
)
|
|
(246
|
)
|
|||
Net income from divested operations
|
$
|
173
|
|
|
$
|
281
|
|
|
$
|
535
|
|
|
|
|
(1)
|
Reflects the net gain (loss) on disposal.
|
For The Year Ended, December 31, 2018
|
|
|
|
|
|
|
||||||
|
|
Funeral
|
|
Cemetery
|
|
Total
|
||||||
Services
|
|
$
|
127,262
|
|
|
$
|
11,342
|
|
|
$
|
138,604
|
|
Merchandise
|
|
74,644
|
|
|
8,158
|
|
|
82,802
|
|
|||
Cemetery property
|
|
—
|
|
|
29,451
|
|
|
29,451
|
|
|||
Other revenue
|
|
8,819
|
|
|
8,316
|
|
|
17,135
|
|
|||
Total
|
|
$
|
210,725
|
|
|
$
|
57,267
|
|
|
$
|
267,992
|
|
For The Year Ended, December 31, 2017
|
|
|
|
|
|
|
||||||
|
|
Funeral
|
|
Cemetery
|
|
Total
|
||||||
Services
|
|
$
|
120,827
|
|
|
$
|
11,765
|
|
|
$
|
132,592
|
|
Merchandise
|
|
71,573
|
|
|
8,187
|
|
|
79,760
|
|
|||
Cemetery property
|
|
—
|
|
|
28,286
|
|
|
28,286
|
|
|||
Other revenue
|
|
8,486
|
|
|
9,015
|
|
|
17,501
|
|
|||
Total
|
|
$
|
200,886
|
|
|
$
|
57,253
|
|
|
$
|
258,139
|
|
For The Year Ended, December 31, 2016
|
|
|
|
|
|
|
||||||
|
|
Funeral
|
|
Cemetery
|
|
Total
|
||||||
Services
|
|
$
|
113,131
|
|
|
$
|
11,230
|
|
|
$
|
124,361
|
|
Merchandise
|
|
67,493
|
|
|
7,982
|
|
|
75,475
|
|
|||
Cemetery property
|
|
—
|
|
|
29,735
|
|
|
29,735
|
|
|||
Other revenue
|
|
8,777
|
|
|
9,852
|
|
|
18,629
|
|
|||
Total
|
|
$
|
189,401
|
|
|
$
|
58,799
|
|
|
$
|
248,200
|
|
|
January 1, 2018
(1)
|
|
December 31, 2018
|
||||
Contract liabilities:
|
|
|
|
||||
Deferred preneed cemetery revenue
|
$
|
54,690
|
|
|
$
|
50,445
|
|
Less: Balances due on undelivered cemetery preneed contracts
(2)
|
(4,594
|
)
|
|
(4,448
|
)
|
||
Deferred preneed cemetery revenue, net
|
$
|
50,096
|
|
|
$
|
45,997
|
|
|
|
|
|
||||
Deferred preneed funeral revenue
|
$
|
34,585
|
|
|
$
|
36,912
|
|
Less: Balances due on undelivered funeral preneed contracts
(3)
|
(7,934
|
)
|
|
(8,306
|
)
|
||
Deferred preneed funeral revenue, net
|
$
|
26,651
|
|
|
$
|
28,606
|
|
|
|
|
|
|
(1)
|
January 1, 2018 balances have been adjusted to reflect the cumulative effect of changes for the adoption of ASC 606.
|
|||
(2)
|
In accordance with Topic 606, $1.4 million of cemetery accounts receivables have been reclassified to reduce deferred preneed cemetery revenue at both January 1, 2018 and December 31, 2018 and $3.2 million and $3.1 million of preneed cemetery receivables have been reclassified to reduce deferred preneed cemetery revenue at January 1, 2018 and December 31, 2018, respectively.
|
|||
(3)
|
In accordance with Topic 606, $7.9 million and $8.3 million of preneed funeral receivables have been reclassified to reduce deferred preneed funeral revenue at January 1, 2018 and December 31, 2018, respectively.
|
|
December 31, 2017
|
|
|
December 31, 2018
|
|
||
Preneed cemetery trust investments, at market value
|
$
|
75,992
|
|
|
$
|
64,549
|
|
Less: allowance for contract cancellation
|
(2,139
|
)
|
|
(2,117
|
)
|
||
Preneed cemetery trust investments, net
|
$
|
73,853
|
|
|
$
|
62,432
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
16,194
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,194
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
3,802
|
|
|
43
|
|
|
(511
|
)
|
|
3,334
|
|
||||
Corporate debt
|
2
|
|
13,987
|
|
|
362
|
|
|
(1,026
|
)
|
|
13,323
|
|
||||
Preferred stock
|
2
|
|
11,068
|
|
|
54
|
|
|
(1,146
|
)
|
|
9,976
|
|
||||
Mortgage-backed securities
|
2
|
|
666
|
|
|
161
|
|
|
(14
|
)
|
|
813
|
|
||||
Common stock
|
1
|
|
24,867
|
|
|
903
|
|
|
(5,436
|
)
|
|
20,334
|
|
||||
Trust securities
|
|
|
$
|
70,584
|
|
|
$
|
1,523
|
|
|
$
|
(8,133
|
)
|
|
$
|
63,974
|
|
Accrued investment income
|
|
|
$
|
575
|
|
|
|
|
|
|
$
|
575
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
64,549
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
90.6
|
%
|
Due in one year or less
|
$
|
—
|
|
Due in one to five years
|
2,116
|
|
|
Due in five to ten years
|
3,847
|
|
|
Thereafter
|
21,483
|
|
|
Total fixed income securities
|
$
|
27,446
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
3,132
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,132
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign debt
|
2
|
|
4,834
|
|
|
292
|
|
|
(193
|
)
|
|
4,933
|
|
||||
Corporate debt
|
2
|
|
18,238
|
|
|
1,184
|
|
|
(273
|
)
|
|
19,149
|
|
||||
Preferred stock
|
2
|
|
16,421
|
|
|
510
|
|
|
(588
|
)
|
|
16,343
|
|
||||
Mortgage-backed securities
|
2
|
|
1,018
|
|
|
249
|
|
|
(24
|
)
|
|
1,243
|
|
||||
Common stock
|
1
|
|
26,465
|
|
|
5,250
|
|
|
(2,460
|
)
|
|
29,255
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed Income
|
2
|
|
1,198
|
|
|
50
|
|
|
(11
|
)
|
|
1,237
|
|
||||
Trust Securities
|
|
|
$
|
71,306
|
|
|
$
|
7,535
|
|
|
$
|
(3,549
|
)
|
|
$
|
75,292
|
|
Accrued investment income
|
|
|
$
|
700
|
|
|
|
|
|
|
$
|
700
|
|
||||
Preneed cemetery trust investments
|
|
|
|
|
|
|
|
|
$
|
75,992
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
105.6
|
%
|
Due in one year or less
|
$
|
303
|
|
Due in one to five years
|
2,183
|
|
|
Due in five to ten years
|
5,376
|
|
|
Thereafter
|
33,806
|
|
|
Total fixed income securities
|
$
|
41,668
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
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
|
$
|
2,140
|
|
|
$
|
(245
|
)
|
|
$
|
895
|
|
|
$
|
(266
|
)
|
|
$
|
3,035
|
|
|
$
|
(511
|
)
|
Corporate debt
|
9,918
|
|
|
(813
|
)
|
|
443
|
|
|
(213
|
)
|
|
10,361
|
|
|
(1,026
|
)
|
||||||
Preferred stock
|
5,253
|
|
|
(399
|
)
|
|
3,767
|
|
|
(747
|
)
|
|
9,020
|
|
|
(1,146
|
)
|
||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
51
|
|
|
(14
|
)
|
|
51
|
|
|
(14
|
)
|
||||||
Common stock
|
14,191
|
|
|
(4,012
|
)
|
|
1,190
|
|
|
(1,424
|
)
|
|
15,381
|
|
|
(5,436
|
)
|
||||||
Total temporary impaired securities
|
$
|
31,502
|
|
|
$
|
(5,469
|
)
|
|
$
|
6,346
|
|
|
$
|
(2,664
|
)
|
|
$
|
37,848
|
|
|
$
|
(8,133
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
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
|
$
|
151
|
|
|
$
|
(6
|
)
|
|
$
|
1,637
|
|
|
$
|
(187
|
)
|
|
$
|
1,788
|
|
|
$
|
(193
|
)
|
Corporate debt
|
3,735
|
|
|
(72
|
)
|
|
846
|
|
|
(201
|
)
|
|
4,581
|
|
|
(273
|
)
|
||||||
Preferred stock
|
48
|
|
|
—
|
|
|
8,109
|
|
|
(588
|
)
|
|
8,157
|
|
|
(588
|
)
|
||||||
Mortgage-backed securities
|
127
|
|
|
(15
|
)
|
|
27
|
|
|
(9
|
)
|
|
154
|
|
|
(24
|
)
|
||||||
Common stock
|
8,249
|
|
|
(1,512
|
)
|
|
1,742
|
|
|
(948
|
)
|
|
9,991
|
|
|
(2,460
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Income
|
496
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
496
|
|
|
(11
|
)
|
||||||
Total temporary impaired securities
|
$
|
12,806
|
|
|
$
|
(1,616
|
)
|
|
$
|
12,361
|
|
|
$
|
(1,933
|
)
|
|
$
|
25,167
|
|
|
$
|
(3,549
|
)
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Investment income
|
$
|
2,250
|
|
|
$
|
2,250
|
|
|
$
|
1,596
|
|
Realized gains
|
2,141
|
|
|
2,218
|
|
|
4,546
|
|
|||
Realized losses
|
(6,559
|
)
|
|
(2,384
|
)
|
|
(5,817
|
)
|
|||
Expenses and taxes
|
(1,266
|
)
|
|
(1,308
|
)
|
|
(907
|
)
|
|||
Net change in deferred preneed cemetery receipts held in trust
|
3,434
|
|
|
(776
|
)
|
|
582
|
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2017
|
|
|
December 31, 2018
|
|
||
Preneed funeral trust investments, at market value
|
$
|
93,341
|
|
|
$
|
84,803
|
|
Less: allowance for contract cancellation
|
(2,659
|
)
|
|
(2,729
|
)
|
||
Preneed funeral trust investments, net
|
$
|
90,682
|
|
|
$
|
82,074
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
31,375
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,375
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
1,319
|
|
|
3
|
|
|
(19
|
)
|
|
1,303
|
|
||||
Foreign debt
|
2
|
|
3,748
|
|
|
44
|
|
|
(503
|
)
|
|
3,289
|
|
||||
Corporate debt
|
2
|
|
14,195
|
|
|
294
|
|
|
(1,025
|
)
|
|
13,464
|
|
||||
Preferred stock
|
2
|
|
11,500
|
|
|
54
|
|
|
(1,194
|
)
|
|
10,360
|
|
||||
Mortgage-backed securities
|
2
|
|
772
|
|
|
168
|
|
|
(18
|
)
|
|
922
|
|
||||
Common stock
|
1
|
|
24,803
|
|
|
887
|
|
|
(5,389
|
)
|
|
20,301
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
2
|
|
275
|
|
|
—
|
|
|
(29
|
)
|
|
246
|
|
||||
Other investments
|
2
|
|
3,006
|
|
|
—
|
|
|
—
|
|
|
3,006
|
|
||||
Trust securities
|
|
|
$
|
90,993
|
|
|
$
|
1,450
|
|
|
$
|
(8,177
|
)
|
|
$
|
84,266
|
|
Accrued investment income
|
|
|
$
|
537
|
|
|
|
|
|
|
$
|
537
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
84,803
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
92.6
|
%
|
Due in one year or less
|
$
|
495
|
|
Due in one to five years
|
3,054
|
|
|
Due in five to ten years
|
3,816
|
|
|
Thereafter
|
21,973
|
|
|
Total fixed income securities
|
$
|
29,338
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
14,349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,349
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury debt
|
1
|
|
1,490
|
|
|
10
|
|
|
(15
|
)
|
|
1,485
|
|
||||
Municipal bonds
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign debt
|
2
|
|
4,870
|
|
|
298
|
|
|
(189
|
)
|
|
4,979
|
|
||||
Corporate debt
|
2
|
|
18,963
|
|
|
1,197
|
|
|
(278
|
)
|
|
19,882
|
|
||||
Preferred stock
|
2
|
|
16,335
|
|
|
501
|
|
|
(585
|
)
|
|
16,251
|
|
||||
Mortgage-backed securities
|
2
|
|
1,187
|
|
|
263
|
|
|
(27
|
)
|
|
1,423
|
|
||||
Common stock
|
1
|
|
26,129
|
|
|
5,253
|
|
|
(2,468
|
)
|
|
28,914
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
2
|
|
1,974
|
|
|
52
|
|
|
(48
|
)
|
|
1,978
|
|
||||
Other investments
|
2
|
|
3,341
|
|
|
—
|
|
|
—
|
|
|
3,341
|
|
||||
Trust securities
|
|
|
$
|
88,638
|
|
|
$
|
7,574
|
|
|
$
|
(3,610
|
)
|
|
$
|
92,602
|
|
Accrued investment income
|
|
|
$
|
739
|
|
|
|
|
|
|
$
|
739
|
|
||||
Preneed funeral trust investments
|
|
|
|
|
|
|
|
|
$
|
93,341
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
104.5
|
%
|
Due in one year or less
|
$
|
320
|
|
Due in one to five years
|
3,744
|
|
|
Due in five to ten years
|
5,782
|
|
|
Thereafter
|
34,174
|
|
|
Total fixed income securities
|
$
|
44,020
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
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. treasury debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,181
|
|
|
$
|
(19
|
)
|
|
$
|
1,181
|
|
|
$
|
(19
|
)
|
Foreign debt
|
2,180
|
|
|
(251
|
)
|
|
850
|
|
|
(252
|
)
|
|
3,030
|
|
|
(503
|
)
|
||||||
Corporate debt
|
9,990
|
|
|
(814
|
)
|
|
434
|
|
|
(211
|
)
|
|
10,424
|
|
|
(1,025
|
)
|
||||||
Preferred stock
|
5,967
|
|
|
(460
|
)
|
|
3,673
|
|
|
(734
|
)
|
|
9,640
|
|
|
(1,194
|
)
|
||||||
Mortgage-backed securities
|
11
|
|
|
—
|
|
|
120
|
|
|
(18
|
)
|
|
131
|
|
|
(18
|
)
|
||||||
Common Stock
|
14,327
|
|
|
(4,035
|
)
|
|
1,155
|
|
|
(1,354
|
)
|
|
15,482
|
|
|
(5,389
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed income
|
—
|
|
|
—
|
|
|
246
|
|
|
(29
|
)
|
|
246
|
|
|
(29
|
)
|
||||||
Total temporary impaired securities
|
$
|
32,475
|
|
|
$
|
(5,560
|
)
|
|
$
|
7,659
|
|
|
$
|
(2,617
|
)
|
|
$
|
40,134
|
|
|
$
|
(8,177
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
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. treasury debt
|
$
|
1,325
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,325
|
|
|
$
|
(15
|
)
|
Foreign debt
|
159
|
|
|
(6
|
)
|
|
1,608
|
|
|
(183
|
)
|
|
1,767
|
|
|
(189
|
)
|
||||||
Corporate debt
|
3,770
|
|
|
(74
|
)
|
|
842
|
|
|
(203
|
)
|
|
4,612
|
|
|
(277
|
)
|
||||||
Preferred stock
|
50
|
|
|
—
|
|
|
8,184
|
|
|
(585
|
)
|
|
8,234
|
|
|
(585
|
)
|
||||||
Mortgage-backed securities
|
221
|
|
|
(17
|
)
|
|
36
|
|
|
(10
|
)
|
|
257
|
|
|
(27
|
)
|
||||||
Common Stock
|
8,001
|
|
|
(1,496
|
)
|
|
1,728
|
|
|
(972
|
)
|
|
9,729
|
|
|
(2,468
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed income
|
549
|
|
|
(12
|
)
|
|
615
|
|
|
(37
|
)
|
|
1,164
|
|
|
(49
|
)
|
||||||
Total temporary impaired securities
|
$
|
14,075
|
|
|
$
|
(1,620
|
)
|
|
$
|
13,013
|
|
|
$
|
(1,990
|
)
|
|
$
|
27,088
|
|
|
$
|
(3,610
|
)
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Investment income
|
$
|
2,344
|
|
|
$
|
2,420
|
|
|
$
|
1,623
|
|
Realized gains
|
2,287
|
|
|
2,386
|
|
|
6,662
|
|
|||
Realized losses
|
(6,642
|
)
|
|
(2,396
|
)
|
|
(5,882
|
)
|
|||
Expenses and taxes
|
(1,174
|
)
|
|
(1,290
|
)
|
|
(885
|
)
|
|||
Net change in deferred preneed funeral receipts held in trust
|
3,185
|
|
|
(1,120
|
)
|
|
(1,518
|
)
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Cemetery interment rights
|
$
|
29,625
|
|
|
$
|
27,728
|
|
Cemetery merchandise and services
|
10,849
|
|
|
9,516
|
|
||
Preneed cemetery receivables
|
$
|
40,474
|
|
|
$
|
37,244
|
|
|
December 31, 2017
|
|
December 31, 2018
|
|
|||||
Accounts receivable, including unearned finance charges and allowance for contract cancellations of $2,779 and $2,405, respectively
|
$
|
11,843
|
|
|
$
|
11,676
|
|
(1
|
)
|
Preneed receivables
, including unearned finance charges and allowance for contract cancellations of $4,922 and $4,049, respectively
|
28,631
|
|
|
25,568
|
|
(2
|
)
|
||
Preneed cemetery receivables
|
$
|
40,474
|
|
|
$
|
37,244
|
|
|
|
|
|
|
|
(1)
|
In accordance with Topic 606, $1.4 million of cemetery accounts receivable has been reclassified to reduce deferred preneed cemetery revenue at December 31, 2018.
|
|||
(2)
|
In accordance with Topic 606, $3.1 million of preneed cemetery receivables has been reclassified to reduce deferred preneed cemetery revenue at December 31, 2018.
|
|
As of December 31,
|
||||||
|
2017
|
|
2018
|
||||
Beginning balance
|
$
|
1,861
|
|
|
$
|
2,019
|
|
Write-offs and cancellations
|
(1,298
|
)
|
|
(1,357
|
)
|
||
Provision
|
1,456
|
|
|
1,146
|
|
||
Ending balance
|
$
|
2,019
|
|
|
$
|
1,808
|
|
|
31-60
Past Due
|
|
61-90
Past Due
|
|
91-120
Past Due
|
|
>120
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total Financing
Receivables
|
||||||||||||||
Recognized revenue
|
$
|
642
|
|
|
$
|
395
|
|
|
$
|
143
|
|
|
$
|
1,139
|
|
|
$
|
2,319
|
|
|
$
|
25,289
|
|
|
$
|
27,608
|
|
Deferred revenue
|
274
|
|
|
165
|
|
|
53
|
|
|
289
|
|
|
781
|
|
|
8,855
|
|
|
9,636
|
|
|||||||
Total contracts
|
$
|
916
|
|
|
$
|
560
|
|
|
$
|
196
|
|
|
$
|
1,428
|
|
|
$
|
3,100
|
|
|
$
|
34,144
|
|
|
$
|
37,244
|
|
|
31-60
Past Due
|
|
61-90
Past Due
|
|
91-120
Past Due
|
|
>120
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total Financing
Receivables
|
||||||||||||||
Recognized revenue
|
$
|
1,140
|
|
|
$
|
530
|
|
|
$
|
155
|
|
|
$
|
1,301
|
|
|
$
|
3,126
|
|
|
$
|
26,449
|
|
|
$
|
29,575
|
|
Deferred revenue
|
380
|
|
|
171
|
|
|
63
|
|
|
392
|
|
|
1,006
|
|
|
9,893
|
|
|
10,899
|
|
|||||||
Total contracts
|
$
|
1,520
|
|
|
$
|
701
|
|
|
$
|
218
|
|
|
$
|
1,693
|
|
|
$
|
4,132
|
|
|
$
|
36,342
|
|
|
$
|
40,474
|
|
|
December 31, 2017
|
|
|
December 31, 2018
|
|
||
Preneed trust funds, at cost
|
$
|
15,759
|
|
|
$
|
17,601
|
|
Less: allowance for contract cancellation
|
(472
|
)
|
|
(528
|
)
|
||
Receivables from preneed trusts, net
|
$
|
15,287
|
|
|
$
|
17,073
|
|
|
Historical
Cost Basis
|
|
Fair Value
|
||||
As of December 31, 2018
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,172
|
|
|
$
|
4,172
|
|
Fixed income investments
|
10,668
|
|
|
10,668
|
|
||
Mutual funds and common stocks
|
2,755
|
|
|
2,709
|
|
||
Annuities
|
6
|
|
|
6
|
|
||
Total
|
$
|
17,601
|
|
|
$
|
17,555
|
|
|
Historical
Cost Basis
|
|
Fair Value
|
||||
As of December 31, 2017
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,903
|
|
|
$
|
3,903
|
|
Fixed income investments
|
9,306
|
|
|
9,306
|
|
||
Mutual funds and common stocks
|
2,544
|
|
|
2,567
|
|
||
Annuities
|
6
|
|
|
6
|
|
||
Total
|
$
|
15,759
|
|
|
$
|
15,782
|
|
|
December 31, 2017
|
|
|
December 31, 2018
|
|
||
Trust assets, at market value
|
$
|
50,229
|
|
|
$
|
44,071
|
|
Obligations due from trust
|
(373
|
)
|
|
(577
|
)
|
||
Care trusts’ corpus
|
$
|
49,856
|
|
|
$
|
43,494
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
11,144
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,144
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
2,872
|
|
|
27
|
|
|
(385
|
)
|
|
2,514
|
|
||||
Corporate debt
|
2
|
|
9,956
|
|
|
227
|
|
|
(730
|
)
|
|
9,453
|
|
||||
Preferred stock
|
2
|
|
8,141
|
|
|
37
|
|
|
(820
|
)
|
|
7,358
|
|
||||
Mortgage-backed securities
|
2
|
|
417
|
|
|
101
|
|
|
(9
|
)
|
|
509
|
|
||||
Common stock
|
1
|
|
15,562
|
|
|
542
|
|
|
(3,395
|
)
|
|
12,709
|
|
||||
Trust securities
|
|
|
$
|
48,092
|
|
|
$
|
934
|
|
|
$
|
(5,339
|
)
|
|
$
|
43,687
|
|
Accrued investment income
|
|
|
$
|
384
|
|
|
|
|
|
|
$
|
384
|
|
||||
Cemetery perpetual care investments
|
|
|
|
|
|
|
|
|
$
|
44,071
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
90.8
|
%
|
Due in one year or less
|
$
|
—
|
|
Due in one to five years
|
1,635
|
|
|
Due in five to ten years
|
2,879
|
|
|
Thereafter
|
15,320
|
|
|
Total fixed income securities
|
$
|
19,834
|
|
|
Fair Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Market Value
|
||||||||
Cash and money market accounts
|
1
|
|
$
|
1,906
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,906
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
2
|
|
3,580
|
|
|
227
|
|
|
(134
|
)
|
|
3,673
|
|
||||
Corporate debt
|
2
|
|
12,557
|
|
|
805
|
|
|
(187
|
)
|
|
13,175
|
|
||||
Preferred stock
|
2
|
|
11,545
|
|
|
364
|
|
|
(411
|
)
|
|
11,498
|
|
||||
Mortgage-backed securities
|
2
|
|
621
|
|
|
152
|
|
|
(15
|
)
|
|
758
|
|
||||
Common stock
|
1
|
|
16,326
|
|
|
3,116
|
|
|
(1,595
|
)
|
|
17,847
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
2
|
|
913
|
|
|
42
|
|
|
(10
|
)
|
|
945
|
|
||||
Trust securities
|
|
|
$
|
47,448
|
|
|
$
|
4,706
|
|
|
$
|
(2,352
|
)
|
|
$
|
49,802
|
|
Accrued investment income
|
|
|
$
|
427
|
|
|
|
|
|
|
$
|
427
|
|
||||
Cemetery perpetual care investments
|
|
|
|
|
|
|
|
|
$
|
50,229
|
|
||||||
Market value as a percentage of cost
|
|
|
|
|
|
|
|
|
105.0
|
%
|
|
December 31, 2018
|
||||||||||||||||||||||
|
In Loss Position Less than 12 months
|
|
In Loss Position Greater than 12 months
|
|
Total
|
||||||||||||||||||
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
|
Fair market value
|
|
Unrealized Losses
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign debt
|
$
|
1,619
|
|
|
$
|
(189
|
)
|
|
$
|
639
|
|
|
$
|
(196
|
)
|
|
$
|
2,258
|
|
|
$
|
(385
|
)
|
Corporate debt
|
7,006
|
|
|
(587
|
)
|
|
301
|
|
|
(143
|
)
|
|
7,307
|
|
|
(730
|
)
|
||||||
Preferred stock
|
3,586
|
|
|
(279
|
)
|
|
2,787
|
|
|
(541
|
)
|
|
6,373
|
|
|
(820
|
)
|
||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
32
|
|
|
(9
|
)
|
|
32
|
|
|
(9
|
)
|
||||||
Common stock
|
9,010
|
|
|
(2,557
|
)
|
|
733
|
|
|
(838
|
)
|
|
9,743
|
|
|
(3,395
|
)
|
||||||
Total temporary impaired securities
|
$
|
21,221
|
|
|
$
|
(3,612
|
)
|
|
$
|
4,492
|
|
|
$
|
(1,727
|
)
|
|
$
|
25,713
|
|
|
$
|
(5,339
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
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
|
92
|
|
|
(3
|
)
|
|
1,128
|
|
|
(131
|
)
|
|
1,220
|
|
|
(134
|
)
|
||||||
Corporate debt
|
2,621
|
|
|
(59
|
)
|
|
555
|
|
|
(128
|
)
|
|
3,176
|
|
|
(187
|
)
|
||||||
Preferred stock
|
29
|
|
|
—
|
|
|
5,492
|
|
|
(411
|
)
|
|
5,521
|
|
|
(411
|
)
|
||||||
Mortgage-backed securities
|
76
|
|
|
(10
|
)
|
|
16
|
|
|
(5
|
)
|
|
92
|
|
|
(15
|
)
|
||||||
Common stock
|
5,119
|
|
|
(991
|
)
|
|
1,108
|
|
|
(604
|
)
|
|
6,227
|
|
|
(1,595
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed income
|
433
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
433
|
|
|
(10
|
)
|
||||||
Total temporary impaired securities
|
$
|
8,370
|
|
|
$
|
(1,073
|
)
|
|
$
|
8,299
|
|
|
$
|
(1,279
|
)
|
|
$
|
16,669
|
|
|
$
|
(2,352
|
)
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Realized gains
|
$
|
872
|
|
|
$
|
926
|
|
|
$
|
1,364
|
|
Realized losses
|
(3,069
|
)
|
|
(1,195
|
)
|
|
(1,896
|
)
|
|||
Net change in Care trusts’ corpus
|
2,197
|
|
|
269
|
|
|
532
|
|
|||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Investment income
|
$
|
6,451
|
|
|
$
|
5,949
|
|
|
$
|
5,934
|
|
Realized gains (losses), net
|
(434
|
)
|
|
(838
|
)
|
|
(1,355
|
)
|
|||
Total
|
$
|
6,017
|
|
|
$
|
5,111
|
|
|
$
|
4,579
|
|
•
|
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 and U.S. treasury debt;
|
•
|
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 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, 2017
and
2018
, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Prepaid agreements not-to-compete, net of accumulated amortization of $6,051 and $6,672, respectively
|
$
|
3,730
|
|
|
$
|
4,048
|
|
Tradenames
|
14,372
|
|
|
17,635
|
|
||
Capitalized commissions on preneed contracts, net of accumulated amortization
of $599
|
—
|
|
|
2,717
|
|
||
Other
|
15
|
|
|
25
|
|
||
Intangible and other non-current assets
|
$
|
18,117
|
|
|
$
|
24,425
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
New Credit Facility
|
$
|
—
|
|
|
$
|
27,100
|
|
Revolving credit facility
|
92,000
|
|
|
—
|
|
||
Term loan
|
127,500
|
|
|
—
|
|
||
Acquisition debt
|
10,548
|
|
|
8,940
|
|
||
Debt issuance costs, net of accumulated amortization of $4,442 and $108
|
(967
|
)
|
|
(955
|
)
|
||
Less: current portion
|
(16,927
|
)
|
|
(2,015
|
)
|
||
Total long-term debt
|
$
|
212,154
|
|
|
$
|
33,070
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||
Long-term liabilities:
|
|
|
|
||||
Principal amount
|
$
|
143,750
|
|
|
$
|
6,346
|
|
Unamortized discount of liability component
|
(17,559
|
)
|
|
(560
|
)
|
||
Convertible Notes issuance costs, net of accumulated amortization of $1,877 and $106, respectively
|
(1,750
|
)
|
|
(54
|
)
|
||
Carrying value of the liability component
|
$
|
124,441
|
|
|
$
|
5,732
|
|
|
|
|
|
||||
Carrying value of the equity component
|
$
|
17,973
|
|
|
$
|
789
|
|
|
|
Principal Maturity
|
|
Discount Amortization
|
|
Present
Value
|
||||||
Years ending December 31,
|
|
|
|
|
|
|
||||||
2019
|
|
$
|
—
|
|
|
$
|
(242
|
)
|
|
$
|
(242
|
)
|
2020
|
|
—
|
|
|
(270
|
)
|
|
(270
|
)
|
|||
2021
|
|
6,346
|
|
|
(48
|
)
|
|
6,298
|
|
|||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
6,346
|
|
|
$
|
(560
|
)
|
|
$
|
5,786
|
|
|
December 31, 2018
|
||
Long-term liabilities:
|
|
||
Principal amount
|
$
|
325,000
|
|
Debt discount, net of accumulated amortization of $273
|
(4,602
|
)
|
|
Debt issuance costs, net of accumulated amortization of $77
|
(1,290
|
)
|
|
Carrying value of the Senior Notes
|
$
|
319,108
|
|
|
|
Principal Maturity
|
|
Discount Amortization
|
|
Present
Value
|
||||||
Years ending December 31,
|
|
|
|
|
|
|
||||||
2019
|
|
$
|
—
|
|
|
$
|
(493
|
)
|
|
$
|
(493
|
)
|
2020
|
|
—
|
|
|
(528
|
)
|
|
(528
|
)
|
|||
2021
|
|
—
|
|
|
(565
|
)
|
|
(565
|
)
|
|||
2022
|
|
—
|
|
|
(605
|
)
|
|
(605
|
)
|
|||
2023
|
|
—
|
|
|
(648
|
)
|
|
(648
|
)
|
|||
Thereafter
|
|
325,000
|
|
|
(1,763
|
)
|
|
323,237
|
|
|||
Total
|
|
$
|
325,000
|
|
|
$
|
(4,602
|
)
|
|
$
|
320,398
|
|
|
Future Minimum Lease
Payments
|
||||||
|
Operating
Leases
|
|
Capital
Leases
|
||||
Years ending December 31,
|
|
|
|
||||
2019
|
$
|
3.7
|
|
|
$
|
0.9
|
|
2020
|
3.2
|
|
|
0.8
|
|
||
2021
|
2.7
|
|
|
0.8
|
|
||
2022
|
0.5
|
|
|
0.8
|
|
||
2023
|
0.3
|
|
|
0.9
|
|
||
Thereafter
|
1.1
|
|
|
7.1
|
|
||
Total future minimum lease payments
|
$
|
11.5
|
|
|
$
|
11.3
|
|
Less: amount representing interest (rates ranging from 7.0% to 11.5%)
|
|
|
(4.9
|
)
|
|||
Less: current portion of obligations under capital leases
|
|
|
(0.3
|
)
|
|||
Long-term obligations under capital leases
|
|
|
$
|
6.1
|
|
|
Non-Compete
|
|
Consulting
|
|
Employment
(a)
|
|
Total
|
||||||||
Years ending December 31,
|
|
|
|
|
|
|
|
||||||||
2019
|
$
|
1.9
|
|
|
$
|
0.9
|
|
|
$
|
1.9
|
|
|
$
|
4.7
|
|
2020
|
1.6
|
|
|
0.7
|
|
|
1.2
|
|
|
3.5
|
|
||||
2021
|
1.5
|
|
|
0.6
|
|
|
0.9
|
|
|
3.0
|
|
||||
2022
|
1.1
|
|
|
0.4
|
|
|
0.8
|
|
|
2.3
|
|
||||
2023
|
0.7
|
|
|
0.2
|
|
|
0.7
|
|
|
1.6
|
|
||||
Thereafter
|
1.3
|
|
|
—
|
|
|
0.2
|
|
|
1.5
|
|
||||
Total
|
$
|
8.1
|
|
|
$
|
2.8
|
|
|
$
|
5.7
|
|
|
$
|
16.6
|
|
|
|
|
(a)
|
Melvin C. Payne, our Chairman of the Board and Chief Executive Officer, has an employment agreement that does not renew after the initial term of five years.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Current:
|
|
|
|
|
|
||||||
U. S. federal provision
|
$
|
6,609
|
|
|
$
|
6,425
|
|
|
$
|
1,489
|
|
State provision
|
1,195
|
|
|
815
|
|
|
1,309
|
|
|||
Total current provision
|
$
|
7,804
|
|
|
$
|
7,240
|
|
|
$
|
2,798
|
|
Deferred:
|
|
|
|
|
|
||||||
U. S. federal provision (benefit)
|
$
|
3,475
|
|
|
$
|
(12,881
|
)
|
|
$
|
2,831
|
|
State provision
|
1,381
|
|
|
1,230
|
|
|
992
|
|
|||
Total deferred provision (benefit)
|
$
|
4,856
|
|
|
$
|
(11,651
|
)
|
|
$
|
3,823
|
|
Total income tax provision (benefit)
|
$
|
12,660
|
|
|
$
|
(4,411
|
)
|
|
$
|
6,621
|
|
|
Year Ended December 31,
|
|
|||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
|||||||||
Federal statutory rate
|
$
|
11,300
|
|
|
35.0
|
|
%
|
$
|
11,474
|
|
|
35.0
|
|
%
|
$
|
3,834
|
|
|
21.0
|
|
%
|
Effect of state income taxes, net of federal benefit
|
1,127
|
|
|
3.5
|
|
|
1,304
|
|
|
4.0
|
|
|
1,776
|
|
|
9.7
|
|
|
|||
Effect of non-deductible expenses and other, net
|
213
|
|
|
0.7
|
|
|
(36
|
)
|
|
(0.1
|
)
|
|
1,451
|
|
|
7.9
|
|
|
|||
Change in valuation allowance
|
20
|
|
|
0.1
|
|
|
23
|
|
|
0.1
|
|
|
26
|
|
|
0.1
|
|
|
|||
Re-measurement of deferred taxes due to tax reform
|
—
|
|
|
—
|
|
|
(17,176
|
)
|
|
(52.4
|
)
|
|
(466
|
)
|
|
(2.5
|
)
|
|
|||
Total
|
$
|
12,660
|
|
|
39.3
|
|
%
|
$
|
(4,411
|
)
|
|
(13.5
|
)
|
%
|
$
|
6,621
|
|
|
36.2
|
|
%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2018
|
||||
Deferred income tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
1,978
|
|
|
$
|
1,569
|
|
Tax credit carryforwards
|
133
|
|
|
133
|
|
||
State bonus depreciation
|
494
|
|
|
970
|
|
||
Accrued liabilities and other
|
6,136
|
|
|
7,544
|
|
||
Amortization of non-compete agreements
|
873
|
|
|
1,135
|
|
||
Preneed liabilities, net
|
5,239
|
|
|
4,242
|
|
||
Total deferred income tax assets
|
14,853
|
|
|
15,593
|
|
||
Less valuation allowance
|
(244
|
)
|
|
(276
|
)
|
||
Total deferred income tax assets
|
$
|
14,609
|
|
|
$
|
15,317
|
|
Deferred income tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
$
|
(41,447
|
)
|
|
$
|
(46,205
|
)
|
Convertible subordinated notes due 2021
|
(4,096
|
)
|
|
(131
|
)
|
||
Prepaids and other
|
(225
|
)
|
|
(244
|
)
|
||
Total deferred income tax liabilities
|
(45,768
|
)
|
|
(46,580
|
)
|
||
Total net deferred tax liabilities
|
$
|
(31,159
|
)
|
|
$
|
(31,263
|
)
|
Current deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
Non-current deferred tax liabilities
|
(31,159
|
)
|
|
(31,263
|
)
|
||
Total net deferred tax liabilities
|
$
|
(31,159
|
)
|
|
$
|
(31,263
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Unrecognized tax benefit at beginning of year
|
$
|
814
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reductions based on tax positions related to the prior year
|
(17
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions for tax year 2011 federal audit
|
(568
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions based on tax positions related to the current year
|
(229
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions as a result of a lapse of the applicable statute of limitations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefit at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Shares
Reserved |
|
Shares
Available to Issue |
|
Options
Outstanding |
|||
Amended and Restated 2006 Plan
|
—
|
|
|
—
|
|
|
1,341
|
|
2017 Plan
|
2,263
|
|
(1)
|
2,075
|
|
|
182
|
|
Total
|
2,263
|
|
|
2,075
|
|
|
1,523
|
|
|
|
|
|
|
(1)
|
Amount includes approximately 708,000 shares granted from the Amended and Restated 2006 Plan that were returned to the Company due to cancellations, to pay taxes on restricted stock vestings and to pay option price and taxes on option exercises.
|
Unvested stock awards
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Unvested at January 1, 2018
|
54
|
|
|
$
|
24.09
|
|
Awards
|
86
|
|
|
25.18
|
|
|
Vestings
|
(32
|
)
|
|
22.68
|
|
|
Cancellations
|
(20
|
)
|
|
25.41
|
|
|
Unvested at December 31, 2018
|
89
|
|
|
$
|
25.38
|
|
|
2016
|
|
2017
|
|
2018
|
|||
Dividend yield
|
0.50
|
%
|
|
0.75
|
%
|
|
1.18
|
%
|
Expected volatility
|
31.21
|
%
|
|
29.29
|
%
|
|
27.08
|
%
|
Risk-free interest rate
|
1.23
|
%
|
|
1.95
|
%
|
|
2.65
|
%
|
Expected holding period (years)
|
5.0
|
|
|
5.0
|
|
|
5.0
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|
Shares
|
|
Wtd. Avg.
Ex. Price
|
|||||||||
Outstanding at beginning of period
|
1,695
|
|
|
$
|
18.95
|
|
|
1,650
|
|
|
$
|
19.18
|
|
|
1,934
|
|
|
$
|
20.85
|
|
Adjustment to beginning balance
|
18
|
|
|
$
|
18.94
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
236
|
|
|
$
|
20.06
|
|
|
462
|
|
|
$
|
26.56
|
|
|
213
|
|
|
$
|
25.43
|
|
Exercised
|
(112
|
)
|
|
$
|
13.76
|
|
|
(159
|
)
|
|
$
|
19.81
|
|
|
(459
|
)
|
|
$
|
17.73
|
|
Canceled or expired
|
(187
|
)
|
|
$
|
21.30
|
|
|
(19
|
)
|
|
$
|
23.17
|
|
|
(165
|
)
|
|
$
|
25.34
|
|
Outstanding at end of year
|
1,650
|
|
|
$
|
19.18
|
|
|
1,934
|
|
|
$
|
20.85
|
|
|
1,523
|
|
|
$
|
21.95
|
|
Exercisable at end of year
|
1,106
|
|
|
$
|
18.21
|
|
|
1,225
|
|
|
$
|
18.68
|
|
|
1,001
|
|
|
$
|
20.29
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Actual Ranges of Exercise Prices
|
Number Outstanding at 12/31/18
|
|
Weighted-Average
Remaining
Contractual Life
|
|
Weighted-Average
Exercise Price
|
|
Number Exercisable at 12/31/18
|
|
Weighted-Average
Exercise Price
|
||||||
$4.78 - $5.94
|
105,603
|
|
|
2.50
|
|
$
|
5.66
|
|
|
105,603
|
|
|
$
|
5.66
|
|
$16.73 - $20.49
|
468,427
|
|
|
2.46
|
|
$
|
20.29
|
|
|
382,627
|
|
|
$
|
20.34
|
|
$22.58 - $26.93
|
949,100
|
|
|
6.11
|
|
$
|
24.58
|
|
|
513,040
|
|
|
$
|
23.26
|
|
$4.78 - $26.93
|
1,523,130
|
|
|
4.74
|
|
$
|
20.85
|
|
|
1,001,270
|
|
|
$
|
20.29
|
|
|
2016
|
|
2017
|
|
2018
|
|||
Dividend yield
|
0.6
|
%
|
|
0.9
|
%
|
|
1.4
|
%
|
Expected volatility
|
25
|
%
|
|
19
|
%
|
|
21
|
%
|
Risk-free interest rate
|
0.22%, 0.49%,0.55%, 0.61%
|
|
|
0.53%, 0.65%,0.77%0.89%
|
|
|
1.44%, 1.61%,1.72%1.83%
|
|
Expected life (years)
|
.25, .50, .75, 1.00
|
|
|
.25, .50, .75, 1.00
|
|
|
.25, .50, .75, 1.00
|
|
2018
|
Per Share
|
|
Dollar Value
|
||||
March 1st
|
$
|
0.075
|
|
|
$
|
1,207
|
|
June 1st
|
$
|
0.075
|
|
|
$
|
1,433
|
|
September 1st
|
$
|
0.075
|
|
|
$
|
1,436
|
|
December 1st
|
$
|
0.075
|
|
|
$
|
1,437
|
|
|
|
|
|
||||
2017
|
Per Share
|
|
Dollar Value
|
||||
March 1st
|
$
|
0.050
|
|
|
$
|
833
|
|
June 1st
|
$
|
0.050
|
|
|
$
|
835
|
|
September 1st
|
$
|
0.050
|
|
|
$
|
835
|
|
December 1st
|
$
|
0.075
|
|
|
$
|
1,206
|
|
|
Accumulated Other Comprehensive Income
|
||
Balance at December 31, 2017
|
$
|
—
|
|
Decrease in net unrealized gains associated with available-for-sale securities of the trusts
|
(17,741
|
)
|
|
Reclassification of net unrealized gain activity attributable to the
Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus’
|
17,741
|
|
|
Balance at December 31, 2018
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
||||||
Net income
|
$
|
19,581
|
|
|
$
|
37,193
|
|
|
$
|
11,645
|
|
Less: Earnings allocated to unvested restricted stock
|
(89
|
)
|
|
(135
|
)
|
|
(57
|
)
|
|||
Income attributable to common stockholders
|
$
|
19,492
|
|
|
$
|
37,058
|
|
|
$
|
11,588
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic earnings per common share - weighted average shares outstanding
|
16,515
|
|
|
16,438
|
|
|
17,971
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
454
|
|
|
336
|
|
|
66
|
|
|||
Convertible subordinated notes
|
491
|
|
|
941
|
|
|
337
|
|
|||
Denominator for diluted earnings per common share - weighted average shares outstanding
|
17,460
|
|
|
17,715
|
|
|
18,374
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per common share
|
$
|
1.18
|
|
|
$
|
2.25
|
|
|
$
|
0.64
|
|
Diluted earnings per common share
|
$
|
1.12
|
|
|
$
|
2.09
|
|
|
$
|
0.63
|
|
|
Funeral
|
|
Cemetery
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
210,725
|
|
|
$
|
57,267
|
|
|
$
|
—
|
|
|
$
|
267,992
|
|
2017
|
200,886
|
|
|
57,253
|
|
|
—
|
|
|
258,139
|
|
||||
2016
|
189,401
|
|
|
58,799
|
|
|
—
|
|
|
248,200
|
|
||||
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
60,881
|
|
|
$
|
15,066
|
|
|
$
|
(32,640
|
)
|
|
$
|
43,307
|
|
2017
|
61,369
|
|
|
15,430
|
|
|
(27,858
|
)
|
|
48,941
|
|
||||
2016
|
61,620
|
|
|
18,030
|
|
|
(29,446
|
)
|
|
50,204
|
|
||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
59,912
|
|
|
$
|
15,349
|
|
|
$
|
(56,995
|
)
|
|
$
|
18,266
|
|
2017
|
60,634
|
|
|
15,852
|
|
|
(43,704
|
)
|
|
32,782
|
|
||||
2016
|
61,163
|
|
|
18,400
|
|
|
(47,322
|
)
|
|
32,241
|
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
10,726
|
|
|
$
|
4,891
|
|
|
$
|
1,813
|
|
|
$
|
17,430
|
|
2017
|
9,785
|
|
|
4,589
|
|
|
1,605
|
|
|
15,979
|
|
||||
2016
|
8,891
|
|
|
5,028
|
|
|
1,502
|
|
|
15,421
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
1,339
|
|
|
$
|
—
|
|
|
$
|
19,770
|
|
|
$
|
21,109
|
|
2017
|
1,170
|
|
|
2
|
|
|
11,776
|
|
|
12,948
|
|
||||
2016
|
826
|
|
|
3
|
|
|
10,909
|
|
|
11,738
|
|
||||
Income tax expense (benefit):
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
21,717
|
|
|
$
|
5,564
|
|
|
$
|
(20,660
|
)
|
|
$
|
6,621
|
|
2017
|
(8,159
|
)
|
|
(2,133
|
)
|
|
5,881
|
|
|
(4,411
|
)
|
||||
2016
|
24,019
|
|
|
7,226
|
|
|
(18,585
|
)
|
|
12,660
|
|
||||
Total assets:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
686,470
|
|
|
$
|
226,475
|
|
|
$
|
4,557
|
|
|
$
|
917,502
|
|
2017
|
665,483
|
|
|
251,243
|
|
|
4,807
|
|
|
921,533
|
|
||||
2016
|
634,145
|
|
|
241,621
|
|
|
9,303
|
|
|
885,069
|
|
||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
572,916
|
|
|
$
|
89,654
|
|
|
$
|
1,538
|
|
|
$
|
664,108
|
|
2017
|
537,282
|
|
|
90,292
|
|
|
2,124
|
|
|
629,698
|
|
||||
2016
|
509,361
|
|
|
89,767
|
|
|
2,548
|
|
|
601,676
|
|
||||
Capital expenditures:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
8,296
|
|
|
$
|
3,989
|
|
|
$
|
1,241
|
|
|
$
|
13,526
|
|
2017
|
9,835
|
|
|
5,283
|
|
|
1,277
|
|
|
16,395
|
|
||||
2016
|
17,411
|
|
|
4,962
|
|
|
731
|
|
|
23,104
|
|
||||
Number of operating locations at year end:
|
|
|
|
|
|
|
|
||||||||
2018
|
182
|
|
|
29
|
|
|
—
|
|
|
211
|
|
||||
2017
|
178
|
|
|
32
|
|
|
—
|
|
|
210
|
|
||||
2016
|
170
|
|
|
32
|
|
|
—
|
|
|
202
|
|
|
December 31,
|
||||||
|
2017
|
|
2018
|
||||
Other current assets:
|
|
|
|
||||
Federal income tax receivable
|
$
|
—
|
|
|
$
|
923
|
|
State income tax receivable
|
889
|
|
|
422
|
|
||
Other current assets
|
97
|
|
|
210
|
|
||
Total other current assets
|
$
|
986
|
|
|
$
|
1,555
|
|
|
|
|
|
||||
Current portion of long-term debt and capital lease obligations
|
|
|
|
||||
Term note
|
$
|
15,000
|
|
|
$
|
—
|
|
Acquisition debt
|
1,927
|
|
|
2,015
|
|
||
Capital leases
|
324
|
|
|
312
|
|
||
Total current portion of long-term debt and capital lease obligations
|
$
|
17,251
|
|
|
$
|
2,327
|
|
|
|
|
|
||||
Other current liabilities:
|
|
|
|
||||
Income taxes payable
|
$
|
1,120
|
|
|
$
|
962
|
|
Deferred rent
|
241
|
|
|
274
|
|
||
Total other current liabilities
|
$
|
1,361
|
|
|
$
|
1,236
|
|
|
|
|
|
||||
Accrued liabilities:
|
|
|
|
||||
Accrued salaries and wages
|
$
|
2,643
|
|
|
$
|
4,088
|
|
Accrued incentive compensation
|
6,412
|
|
|
7,395
|
|
||
Accrued vacation
|
2,417
|
|
|
2,358
|
|
||
Accrued insurance
|
1,832
|
|
|
3,188
|
|
||
Accrued interest
|
1,271
|
|
|
1,856
|
|
||
Accrued ad valorem and franchise taxes
|
1,003
|
|
|
904
|
|
||
Accrued commissions
|
461
|
|
|
441
|
|
||
Other accrued liabilities
|
1,520
|
|
|
1,178
|
|
||
Total accrued liabilities
|
$
|
17,559
|
|
|
$
|
21,408
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred rent
|
$
|
966
|
|
|
$
|
692
|
|
Incentive compensation
|
1,287
|
|
|
1,563
|
|
||
Contingent consideration
|
1,125
|
|
|
878
|
|
||
Total other long-term liabilities
|
$
|
3,378
|
|
|
$
|
3,133
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
73,387
|
|
|
$
|
63,847
|
|
|
$
|
64,241
|
|
|
$
|
66,517
|
|
Gross profit
|
24,188
|
|
|
16,825
|
|
|
17,114
|
|
|
17,820
|
|
||||
Net income (loss)
|
$
|
9,356
|
|
|
$
|
2,747
|
|
|
$
|
2,200
|
|
|
$
|
(2,658
|
)
|
Basic earnings per common share: (a)
|
$
|
0.58
|
|
|
$
|
0.15
|
|
|
$
|
0.11
|
|
|
$
|
(0.14
|
)
|
Diluted earnings per common share: (a)
|
$
|
0.52
|
|
|
$
|
0.15
|
|
|
$
|
0.11
|
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
68,157
|
|
|
$
|
63,852
|
|
|
$
|
61,054
|
|
|
$
|
65,076
|
|
Gross profit
|
23,092
|
|
|
18,667
|
|
|
15,480
|
|
|
19,560
|
|
||||
Net income
|
$
|
7,084
|
|
|
$
|
4,410
|
|
|
$
|
3,038
|
|
|
$
|
22,661
|
|
Basic earnings per common share: (a)
|
$
|
0.42
|
|
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
1.41
|
|
Diluted earnings per common share: (a)
|
$
|
0.39
|
|
|
$
|
0.24
|
|
|
$
|
0.17
|
|
|
$
|
1.31
|
|
|
|
|
(a)
|
Earnings per share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts may not equal the total computed for 2017 and 2018 due to rounding.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2017
|
|
2018
|
||||||
Cash paid for interest and financing costs
|
$
|
10,366
|
|
|
$
|
11,092
|
|
|
$
|
18,858
|
|
Cash paid for taxes
|
10,874
|
|
|
5,902
|
|
|
3,543
|
|
|||
Fair value of stock, stock options and performance awards issued to directors, officers, and certain other employees
|
3,275
|
|
|
6,854
|
|
|
6,563
|
|
Description
|
Balance at
beginning
of year
|
|
Charged to
costs and
expenses
|
|
Deduction
|
|
Balance at end
of year
|
||||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
729
|
|
|
$
|
1,155
|
|
|
$
|
1,138
|
|
|
$
|
746
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
2,042
|
|
|
$
|
943
|
|
|
$
|
819
|
|
|
$
|
2,166
|
|
Employee severance accruals
|
$
|
280
|
|
|
$
|
3,641
|
|
|
$
|
2,404
|
|
|
$
|
1,517
|
|
Valuation allowance of the deferred tax asset
|
$
|
189
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
209
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
746
|
|
|
$
|
1,248
|
|
|
$
|
1,159
|
|
|
$
|
835
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
2,166
|
|
|
$
|
950
|
|
|
$
|
838
|
|
|
$
|
2,278
|
|
Employee severance accruals
|
$
|
1,517
|
|
|
$
|
571
|
|
|
$
|
2,088
|
|
|
$
|
—
|
|
Valuation allowance of the deferred tax asset
|
$
|
209
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
244
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Allowance for bad debts, current portion
|
$
|
835
|
|
|
$
|
1,111
|
|
|
$
|
1,177
|
|
|
$
|
769
|
|
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, non-current portion
|
$
|
2,278
|
|
|
$
|
730
|
|
|
$
|
857
|
|
|
$
|
2,151
|
|
Employee severance accruals
|
$
|
—
|
|
|
$
|
1,649
|
|
|
$
|
508
|
|
|
$
|
1,141
|
|
Valuation allowance of the deferred tax asset
|
$
|
244
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
276
|
|
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/ Viki K. Blinderman
|
Viki K. Blinderman
|
Senior Vice President, Principal Financial Officer and Secretary
|
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
|
1,523,130
|
|
|
$
|
21.95
|
|
|
2,075,073
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
1,523,130
|
|
|
$
|
21.95
|
|
|
2,075,073
|
|
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
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
3.6
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
*21.1
|
|
|
|
|
|
*23.1
|
|
|
|
|
|
*31.1
|
|
|
|
|
*31.2
|
|
|
|
|
|
**32
|
|
|
|
|
|
*101
|
|
Interactive Data Files.
|
(*)
|
Filed herewith.
|
(**)
|
Furnished herewith.
|
(†)
|
Management contract or compensatory plan or arrangement.
|
ITEM 16.
|
FORM 10-K SUMMARY.
|
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 28, 2019
|
|
|
|
||
/s/ Viki K. Blinderman
|
|
Senior Vice President, Principal Financial Officer and Secretary
|
|
February 28, 2019
|
Viki K. Blinderman
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Adeola Olaniyan
|
|
Corporate Controller and Principal Accounting Officer
|
|
February 28, 2019
|
Adeola Olaniyan
|
|
|
|
|
|
|
|
|
|
/s/ Donald D. Patteson Jr.
|
|
Director
|
|
February 28, 2019
|
Donald D. Patteson Jr.
|
|
|
|
|
|
|
|
||
/s/ James R. Schenck
|
|
Director
|
|
February 28, 2019
|
James R. Schenck
|
|
|
|
|
|
|
|
||
/s/ Barry K. Fingerhut
|
|
Director
|
|
February 28, 2019
|
Barry K. Fingerhut
|
|
|
|
|
|
|
|
|
|
/s/ Bryan D. Leibman
|
|
Director
|
|
February 28, 2019
|
Bryan D. Leibman
|
|
|
|
|
|
|
|
|
|
/s/ Douglas Meehan
|
|
Director
|
|
February 28, 2019
|
Douglas Meehan
|
|
|
|
|
|
|
|
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
|
PNCA, Inc.
|
|
Delaware
|
Carriage Operations, Inc.
|
|
Delaware
|
Carriage Services of Tennessee, 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”);
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Dated:
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February 28, 2019
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/s/ Melvin C. Payne
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Melvin C. Payne
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Chief Executive Officer and Chairman of the Board
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of Carriage Services, Inc. (the “registrant”);
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Dated:
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February 28, 2019
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/s/ Viki K. Blinderman
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Viki K. Blinderman
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Senior Vice President, Principal Financial Officer and Secretary
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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February 28, 2019
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/s/ Melvin C. Payne
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Melvin C. Payne
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Chief Executive Officer and Chairman of the Board
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(Principal Executive Officer)
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/s/ Viki K. Blinderman
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Viki K. Blinderman
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Senior Vice President, Principal Financial Officer and Secretary
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