# CARRIAGE SERVICES INC (CSV)

Informational only - not investment advice.

CIK: 0001016281
SIC: 7200 Services-Personal Services
SIC breadcrumb: [Services](/division/I/) > [SIC Major Group 72](/major-group/72/) > [SIC 7200 Services-Personal Services](/industry/7200/)
Latest 10-K filed: 2026-02-26
SEC page: https://www.sec.gov/edgar/browse/?CIK=1016281
Filing source: https://www.sec.gov/Archives/edgar/data/1016281/000101628126000021/csv-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 417440000 | USD | 2025 | 2026-02-26 |
| Net income | 51507000 | USD | 2025 | 2026-02-26 |
| Assets | 1345905000 | USD | 2025 | 2026-02-26 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001016281.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2012 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  | 248,200,000 | 258,139,000 | 267,992,000 | 274,107,000 | 329,448,000 | 375,886,000 | 370,174,000 | 382,520,000 | 404,198,000 | 417,440,000 |
| Net income |  |  | 19,581,000 | 37,193,000 | 11,645,000 | 14,533,000 | 16,090,000 | 33,159,000 | 41,381,000 | 33,413,000 | 32,953,000 | 51,507,000 |
| Operating income |  |  | 50,204,000 | 48,941,000 | 42,112,000 | 47,443,000 | 57,227,000 | 93,660,000 | 79,726,000 | 80,979,000 | 81,799,000 | 97,657,000 |
| Gross profit |  |  | 79,650,000 | 76,799,000 | 75,947,000 | 79,585,000 | 105,923,000 | 129,516,000 | 119,226,000 | 124,295,000 | 143,390,000 | 146,676,000 |
| Diluted EPS |  |  | 1.12 | 2.09 | 0.63 | 0.80 | 0.89 | 1.81 | 2.63 | 2.14 | 2.10 | 3.25 |
| Operating cash flow | 25,761,000 |  |  | 45,230,000 | 48,994,000 | 43,216,000 | 82,915,000 | 84,246,000 | 61,024,000 | 75,590,000 | 51,996,000 | 60,693,000 |
| Capital expenditures |  |  | 16,846,000 | 16,395,000 | 13,526,000 | 15,379,000 | 15,198,000 | 24,883,000 | 26,081,000 | 18,039,000 | 16,098,000 | 20,628,000 |
| Dividends paid |  |  | 2,492,000 | 3,709,000 | 5,513,000 | 5,398,000 | 6,048,000 | 7,264,000 | 6,763,000 | 6,708,000 | 6,807,000 | 7,025,000 |
| Share buybacks |  | 44,999,000 | 0.00 | 16,366,000 | 16,266,000 | 9,152,000 | 0.00 | 140,040,000 | 36,663,000 | 0.00 | 0.00 |  |
| Assets |  |  | 921,533,000 | 917,502,000 | 1,129,755,000 | 1,145,825,000 | 1,178,631,000 | 1,178,631,000 | 1,192,950,000 | 1,268,052,000 | 1,279,580,000 | 1,345,905,000 |
| Liabilities |  |  | 709,335,000 | 723,877,000 | 696,010,000 | 903,186,000 | 905,323,000 | 1,050,616,000 | 1,055,816,000 | 1,094,992,000 | 1,071,030,000 | 1,091,129,000 |
| Stockholders' equity |  |  | 175,734,000 | 197,656,000 | 221,492,000 | 226,569,000 | 240,502,000 | 128,015,000 | 137,134,000 | 173,060,000 | 208,550,000 | 254,776,000 |
| Cash and cash equivalents |  |  | 952,000 | 952,000 | 644,000 | 716,000 | 889,000 | 1,148,000 | 1,170,000 | 1,523,000 | 1,165,000 | 1,688,000 |
| Free cash flow |  |  |  | 28,835,000 | 35,468,000 | 27,837,000 | 67,717,000 | 59,363,000 | 34,943,000 | 57,551,000 | 35,898,000 | 40,065,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2012 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  | 7.89% | 14.41% | 4.35% | 5.30% | 4.88% | 8.82% | 11.18% | 8.73% | 8.15% | 12.34% |
| Operating margin |  |  | 20.23% | 18.96% | 15.71% | 17.31% | 17.37% | 24.92% | 21.54% | 21.17% | 20.24% | 23.39% |
| Return on equity |  |  | 11.14% | 18.82% | 5.26% | 6.41% | 6.69% | 25.90% | 30.18% | 19.31% | 15.80% | 20.22% |
| Return on assets |  |  | 2.12% | 4.05% | 1.03% | 1.27% | 1.37% | 2.81% | 3.47% | 2.63% | 2.58% | 3.83% |
| Liabilities / equity |  |  | 4.04 | 3.66 | 3.14 | 3.99 | 3.76 | 8.21 | 7.70 | 6.33 | 5.14 | 4.28 |
| Current ratio |  |  | 0.74 | 0.71 | 0.84 | 1.12 | 0.73 | 0.66 | 0.84 | 0.82 | 0.77 | 0.98 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001016281.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2013-Q2 | 2013-06-30 |  |  | 0.23 | reported discrete quarter |
| 2013-Q3 | 2013-09-30 |  |  | 0.32 | reported discrete quarter |
| 2014-Q1 | 2014-03-31 |  |  | 0.12 | reported discrete quarter |
| 2014-Q2 | 2014-06-30 |  |  | 0.17 | reported discrete quarter |
| 2014-Q3 | 2014-09-30 |  |  | 0.26 | reported discrete quarter |
| 2015-Q1 | 2015-03-31 |  | 6,418,000 | 0.34 | reported discrete quarter |
| 2015-Q2 | 2015-06-30 |  |  | 0.24 | reported discrete quarter |
| 2015-Q3 | 2015-09-30 |  |  | 0.24 | reported discrete quarter |
| 2015-Q4 | 2015-12-31 |  | 5,434,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2016-Q1 | 2016-03-31 |  | 4,571,000 |  | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 97,678,000 |  |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 90,494,000 |  |  | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 98,834,000 |  |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 103,493,000 | 6,973,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 102,318,000 | 6,259,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 100,687,000 | 9,866,000 |  | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 97,700,000 | 9,855,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 107,069,000 | 20,926,000 | 1.34 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 102,147,000 | 11,739,000 | 0.74 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 102,742,000 | 6,570,000 | 0.41 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 105,482,000 | 12,272,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 106,120,000 | 13,492,000 | 0.84 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1016281/000101628126000037/csv-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-07
Report date: 2026-03-31

Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

General

We operate in two business segments: Funeral Home Operations, which currently accounts for approximately 68% of our total revenue and Cemetery Operations, which currently accounts for approximately 32% of our total revenue. At March 31, 2026, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states.

Our funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns. Funeral services include consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. We provide funeral services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis.

Our cemetery operations generate revenue primarily through sales of cemetery interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise). We provide cemetery services and products on both an atneed and preneed basis.

COMPANY DEVELOPMENTS

ATM Offering Program

On May 6, 2026, the Company announced it has entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc. and Raymond James & Associates, Inc., serving as sales agents (together, the “Sales Agents”), with respect to its at-the-market offering program under which the Company may offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $100.0 million through the Sales Agents.

Macroeconomic and Inflationary Factors

During 2026, consumer discretionary spending has reflected mixed trends, with higher-income consumers appearing more resilient and moderate-income consumers exhibiting more cautious behavior, which could result in an overall reduction in consumer spending and demand for products and services. These trends are also influenced by moderating but still elevated inflation. Although certain indicators suggest that inflation has moderated, we continue to monitor potential impacts due to ongoing geopolitical tensions and evolving tariff and trade policies. These pressures, along with volatility in energy prices, interest rates, and ongoing tariff developments, may result in certain costs remaining elevated and contribute to broader economic uncertainty. Such inflation may negatively impact consumer discretionary spending, including the amount that consumers are able to spend on our services, although we have not experienced any material impacts to date and our industry has been largely resilient to similar adverse economic and market environments in the past. To date, these conditions have not materially impacted our business.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity and capital resources are internally generated cash flows from operating activities and availability under our Credit Facility.

We generate cash in our operations primarily from atneed sales and delivery of preneed sales. We also generate cash from earnings on our cemetery perpetual care trusts. Based on our recent operating results, current cash position and anticipated future cash flows, we do not anticipate any significant liquidity constraints in the foreseeable future. We have the ability to draw on our Credit Facility, as needed, subject to its customary terms and conditions. For additional details related to our debt and lease obligations, including our Credit Facility, Acquisition Debt and Senior Notes, refer to Notes 10 to our unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

For 2026, our plan is to remain focused on executing our growth strategy and other strategic objectives. This includes prioritizing our capital allocation for potential strategic growth acquisitions, capital expenditures, debt repayments, the payment of dividends, and other general corporate purposes as allowed under our Credit Facility. We expect to fund these payments using cash on hand and borrowings under our Credit Facility. We believe that our existing and anticipated cash resources, including, as needed, additional borrowings or other financings that we may be able to obtain, will be sufficient to meet our

27

anticipated working capital requirements, capital expenditures, scheduled debt payments, commitments, potential growth acquisitions, and dividends for the next 12 months, as well as our long-term financial obligations.

However, if our capital allocations and expenditures or acquisition plans change, we may need to access the capital markets, including, for example, through our ATM Program, or seek further borrowing capacity from our lenders to obtain additional funding and we may not be able to obtain such funding on terms and conditions that are acceptable to us. Further, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future liquidity may be adversely affected. For additional information regarding known material factors that could cause cash flow or access to and cost of finance sources to differ from our expectations, please read Part I, Item 1A, “Risk Factors”.

Cash Flows

We began 2026 with $1.7 million in cash and ended the year with $2.9 million in cash. As of March 31, 2026, we had borrowings of $120.5 million outstanding on our Credit Facility compared to $126.7 million as of December 31, 2025.

The following table sets forth the elements of cash flow (in thousands):

Three months ended March 31,

2026

2025

Cash and cash equivalents at beginning of period

$

1,688 

$

1,165 

Net cash provided by operating activities

14,898 

13,792 

Capital expenditures

(3,896)

(3,163)

Proceeds from divestitures and sale of other assets

16 

18,660 

Net cash (used in) provided by investing activities

(3,880)

15,497 

Net payments on our credit facility, acquisition debt, and finance lease obligations

(6,314)

(17,148)

Net payments on employee equity plans

(1,712)

(6,941)

Dividends paid on common stock

(1,772)

(1,722)

Net cash used in financing activities

(9,798)

(25,811)

Cash and cash equivalents at end of period

$

2,908 

$

4,643 

Operating Activities

For the three months ended March 31, 2026, cash provided by operating activities was $14.9 million compared to $13.8 million for the three months ended March 31, 2025.

Investing Activities

Our investing activities resulted in net cash outflows of $3.9 million for the three months ended March 31, 2026, compared to net cash inflows of $15.5 million for the three months ended March 31, 2025, a decrease of $19.4 million.

Acquisition and Divestiture Activity

During the three months ended March 31, 2025, we sold two funeral homes and three cemeteries for an aggregate of $15.8 million. Additionally, we sold real property for $2.9 million.

Capital Expenditures

For the three months ended March 31, 2026, our capital expenditures (comprised of growth and maintenance spend) totaled $3.9 million compared to $3.2 million for the year ended March 31, 2025, an increase of $0.7 million.

The following tables present our capital expenditures (in thousands):

Three months ended March 31,

2026

2025

Growth

$

1,696 

$

1,753 

Maintenance

2,200 

1,410 

Total Capital Expenditures

$

3,896 

$

3,163 

28

Financing Activities

Our financing activities resulted in a net cash outflow of $9.8 million for the three months ended March 31, 2026, compared to a net cash outflow of $25.8 million for the three months ended March 31, 2025, a decrease of $16.0 million.

During the three months ended March 31, 2026, we had net payments on our Credit Facility, acquisition debt, and finance leases of $6.3 million, net payments on our employee equity plans of $1.7 million, and paid dividends of $1.8 million.

During the three months ended March 31, 2025, we had net payments on our Credit Facility, acquisition debt, and finance leases of $17.1 million, net payments on our employee equity plans of $6.9 million, and paid dividends of $1.7 million.

FINANCIAL HIGHLIGHTS

Below are our consolidated financial highlights (in thousands except for volumes and averages):

Three months ended March 31,

2026

2025

Inc/(Dec)

% Change

Total revenue

$

106,120 

$

107,069 

$

(949)

(0.9)

%

Funeral contracts

11,218 

11,319 

(101)

(0.9)

%

Average revenue per funeral contract

$

6,051 

$

5,869 

$

182 

3.1 

%

Preneed insurance contracts sold

2,927 

2,711 

216 

8.0 

%

Preneed interment rights (property) sold

3,153 

3,236 

(83)

(2.6)

%

Average price per preneed interment right (property) sold

$

6,017 

$

5,419 

$

598 

11.0 

%

Preneed sales production (M&S and property)

$

23,900 

$

21,731 

$

2,169 

10.0 

%

Gross profit

$

38,640 

$

37,842 

$

798 

2.1 

%

Net income

$

13,492 

$

20,926 

$

(7,434)

(35.5)

%

Revenue for the three months ended March 31, 2026 decreased $0.9 million compared to the three months ended March 31, 2025, primarily due to a decrease in divested revenue that was partially offset by growth in acquisition revenue. In our Funeral segment, we experienced a 0.9% decrease in funeral contract volume; partially offset by a 3.1% increase in the average revenue per funeral contract, and an 8.0% increase in preneed insurance contracts sold. In our Cemetery segment, we experienced a 10.0% increase in preneed sales production (M&S and property) and an 11.0% increase in the average price per interment right (property) sold; partially offset by a 2.6% decrease in the number of preneed interment rights (property) sold.

Gross profit for the three months ended March 31, 2026 increased $0.8 million compared to the three months ended March 31, 2025, primarily due to effective cost management.

Net income for the three months ended March 31, 2026 decreased $7.4 million compared to the three months ended March 31, 2025, primarily due to a prior year net gain on divestitures, impairment charges, and sale of real property of $7.8 million and a $1.0 million increase in general and administrative expenses; partially offset by a $0.8 million increase in gross profit contribution from our businesses, a $0.4 million decrease in interest expense, and a $0.4 million decrease in income tax expenses.

Further discussion of revenue and the components of gross profit for our funeral home and cemetery segments is presented under “– Results of Operations.”

Further discussion of general, administrative and other expenses, interest expense, income taxes and other components of income and expenses are presented under “– Other Financial Statement Items.”

REPORTING AND NON-GAAP FINANCIAL MEASURES

We also present our financial performance in our “Condensed Operating and Financial Trend Report” (“Trend Report”) as reported in our earnings release for the three months ended March 31, 2026, dated May 6, 2026, and discussed in the corresponding earnings conference call. This Trend Report is used as a supplemental financial statement by management and investors to compare our current financial performance with our previous results and with the performance of other companies. Additionally, management employs segment gross profit for product pricing evaluation and uses segment adjusted operating profit to assess each segment’s performance by comparing results. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP. The Trend Report is a non-GAAP statement that also provides insight into underlying trends i

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

General

We operate in two business segments: Funeral Home Operations, which currently accounts for approximately 65% of our total revenue and Cemetery Operations, which currently accounts for approximately 35% of our total revenue. At December 31, 2025, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states.

Our funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns. Funeral services include consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. We provide funeral services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis.

Our cemetery operations generate revenue primarily through sales of cemetery interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise). We provide cemetery services and products on both an atneed and preneed basis.

Funeral Home Operations

Factors affecting our funeral operating results include: demographic trends relating to population growth and average age, which impact death rates and number of deaths; establishing and maintaining leading market share positions supported by strong local heritage and relationships; effectively responding to increasing cremation trends by selling complementary services and merchandise; controlling salary, merchandise, and other controllable costs; exercising pricing leverage related to our atneed business to increase average revenue per contract; and our response to fluctuations in capital markets and interest rates, which affect investment earnings on trust funds, which would offset lower pricing power as preneed contracts mature. Overall, volume, as funeral services performed, and pricing fluctuations impacting our average revenue per contract are the two variables that primarily affect funeral revenue. The average revenue per contract is influenced by the mix of traditional and cremation services as our average cremation service revenue is approximately one-third of the average revenue earned from a traditional burial service. Funeral homes have a relatively large fixed cost structure.

Cemetery Operations

Factors affecting our cemetery operating results include: the size and success of our sales organization; local perceptions and heritage of our cemeteries; our ability to adapt to changes in the economy and consumer confidence; controlling salary, merchandise, and other controllable costs; exercising pricing leverage related to our atneed business to increase average price per interment right sold; and our response to fluctuations in capital markets and interest rates, which affect investment earnings on trust funds, finance charges on installment contracts and our securities portfolio within the trust funds.

Macroeconomic, Inflationary, and Borrowing Costs

During 2025, consumer spending on discretionary items reflected mixed trends. Based on recent economic indicators, aggregate consumer spending continues to reflect minimal to modest growth, with higher-income consumers appearing more resilient, while many middle and lower-income consumers exhibit more cautious behavior, which could result in an overall reduction in consumer spending and demand for products and services. This consumer caution appears to be influenced by factors like elevated inflation, heightened tariff and trade-policy uncertainty, and a more cautious macroeconomic environment. Additionally, beginning in April 2025, the U.S. government announced new and increased tariffs on countries and specific goods, subject to evolving exemptions and additional proposed revisions. Certain of these tariffs have been stayed or otherwise modified and, since April 2025, the U.S. has continued to announce new or revised tariffs, along with new trade agreements with certain trading partners. Those policies, along with retaliatory actions by some trading partners and ongoing negotiations around trade policy, have led to increased uncertainty regarding the ultimate effect of the tariffs on economic conditions, volatility, and unpredictability for global trade. Given these uncertainties and the potential of rising tariffs, we evaluated, and continue to evaluate, our current vendor agreements for our major vendors to ensure, to the extent possible, we adequately addressed any associated risks.

We also continue to monitor the impacts of inflationary costs to our business. While inflationary pressures appear to have moderated and stabilized, we are unable to forecast or predict with any certainty whether inflationary costs will remain stable and continue to moderate in future periods, as the ultimate scope and duration of these impacts could change as a result of the impact of increased tariffs and remain unknown at this time. More broadly, the U.S. economy continues to experience the

24

impact of several years of higher rates of inflation, which has impacted a wide variety of industries and sectors, with consumers facing rising prices. Such inflation may negatively impact consumer discretionary spending, including the amount that consumers are able to spend on our services, although we have not experienced any material impacts to date and our industry has been largely resilient to similar adverse economic and market environments in the past.

Although such conditions have not materially impacted our business to date and we expect these trends to continue into 2026, we will continue to assess these impacts and take the appropriate steps, if necessary, to mitigate any changes in consumer preferences or additional cost increases, if possible.

In addition, after giving effect to the Credit Facility Amendment, executed during the third quarter of 2024, we continue to experience lower variable interest rates and lower average debt outstanding under our Credit Facility, which resulted in lower borrowing costs in 2025 compared to the prior year.

For further discussion of our key operating metrics, see our "Cash Flows", "Financial Highlights" and "Results of Operations" sections below. For discussion of our results of operations and liquidity and capital resources for the fiscal year ended December 31, 2024, see Management's Discussion and Analysis of Financial Conditions, Liquidity and Capital Resources, Financial Highlights, and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year December 31, 2024, filed with the Securities and Exchange Commission on February 28, 2025.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity and capital resources are internally generated cash flows from operating activities and availability under our Credit Facility.

We generate cash in our operations primarily from atneed sales and delivery of preneed sales. We also generate cash from earnings on our cemetery perpetual care trusts. Based on our recent operating results, current cash position and anticipated future cash flows, we do not anticipate any significant liquidity constraints in the foreseeable future. We have the ability to draw on our Credit Facility, as needed, subject to its customary terms and conditions.

For 2026, our plan is to remain focused on executing our growth strategy and other strategic objectives. This includes prioritizing our capital allocation for potential strategic growth acquisitions, capital expenditures, debt repayments, the payment of dividends, and other general corporate purposes as allowed under our Credit Facility. We expect to fund these payments using cash on hand and borrowings under our Credit Facility. We believe that our existing and anticipated cash resources, including, as needed, additional borrowings or other financings that we may be able to obtain, will be sufficient to meet our anticipated working capital requirements, capital expenditures, scheduled debt payments, commitments, potential growth acquisitions, and dividends for the next 12 months, as well as our long-term financial obligations.

However, if our capital allocations and expenditures or acquisition plans change, we may need to access the capital markets or seek further borrowing capacity from our lenders to obtain additional funding and we may not be able to obtain such funding on terms and conditions that are acceptable to us. Further, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future liquidity may be adversely affected. For additional information regarding known material factors that could cause cash flow or access to and cost of finance sources to differ from our expectations, please read Part I, Item 1A, “Risk Factors”.

Cash Flows

We began 2025 with $1.2 million in cash and ended the year with $1.7 million in cash. As of December 31, 2025, we had borrowings of $126.7 million outstanding on our Credit Facility compared to $137.0 million as of December 31, 2024.

25

The following table sets forth the elements of cash flow (in thousands):

Year Ended December 31,

2025

2024

Cash and cash equivalents at beginning of period

$

1,165 

$

1,523 

Net cash provided by operating activities

60,693 

51,996 

Acquisitions of businesses and real property

(59,026)

— 

Capital expenditures

(20,628)

(16,098)

Proceeds from divestitures and sale of other assets

44,483 

12,057 

Proceeds from insurance claims

— 

403 

Net cash used in investing activities

(35,171)

(3,638)

Net payments on our credit facility, acquisition debt, and finance lease obligations

(11,416)

(43,161)

Payment of debt issuance costs for the credit facility

— 

(781)

Net payments on employee equity plans

(6,558)

2,033 

Dividends paid on common stock

(7,025)

(6,807)

Net cash used in financing activities

(24,999)

(48,716)

Cash and cash equivalents at end of period

$

1,688 

$

1,165 

Operating Activities

For the year ended December 31, 2025, cash provided by operating activities was $60.7 million compared to $52.0 million for the year ended December 31, 2024.

Investing Activities

Our investing activities resulted in a net cash outflows of $35.2 million for the year ended December 31, 2025, compared to net cash inflows of $3.6 million for the year ended December 31, 2024, a decrease of $31.5 million.

Acquisition and Divestiture Activity

During the year ended December 31, 2025, we acquired eight funeral homes, one cemetery, and one cremation focused business in Florida for an aggregate price of $56.5 million. We acquired substantially all of the assets and assumed certain operating liabilities of these businesses. Additionally, we acquired the real property for one funeral home that we previously leased from a third party for a purchase price of $2.5 million.

During the year ended December 31, 2025, we sold thirteen funeral homes and four cemeteries for an aggregate of $40.4 million. Additionally, we sold real property for $4.0 million.

During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $10.9 million. Additionally, we sold real property for $1.1 million.

Insurance Proceeds

During the year ended December 31, 2024, we received proceeds of $0.4 million from our property insurance policy for the reimbursement of renovation costs for certain of our funeral businesses damaged by Hurricane Ian that occurred during the third quarter of 2022.

Capital Expenditures

For the year ended December 31, 2025, our capital expenditures (comprised of growth and maintenance spend) totaled $20.6 million compared to $16.1 million for the year ended December 31, 2024, an increase of $4.5 million.

26

The following tables present our capital expenditures (in thousands):

Year ended December 31,

2025

2024

Growth

$

13,639 

$

8,786 

Maintenance

6,989 

7,312 

Total Capital Expenditures

$

20,628 

$

16,098 

Financing Activities

Our financing activities resulted in a net cash outflow of $25.0 million for the year ended December 31, 2025, compared to a net cash outflow of $48.7 million for the year ended December 31, 2024, a decrease of $23.7 million.

During the year ended December 31, 2025, we had net payments on our Credit Facility, acquisition debt, and finance leases of $11.4 million, net payments on our employee equity plans of $6.6 million, and paid dividends of $7.0 million.

During the year ended December 31, 2024, we had net payments on our Credit Facility, acquisition debt, and finance leases of $43.2 million and paid dividends of $6.8 million.

Credit Facility, Lease Obligations, and Acquisition Debt

Credit Facility

At December 31, 2025, we had outstanding borrowings under the Credit Facility of $126.7 million. We also had one letter of credit for $2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2026 and is expected to automatically renew annually. At December 31, 2025, we had $121.1 million of availability under the Credit Facility.

See Note 12 of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to our Credit Facility. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report.

Lease Obligations

Our lease obligations consist of operating and finance leases for certain office facilities and funeral homes as well as vehicles and equipment. See Note 14 of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to lease obligations. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report.

Acquisition Debt

Acquisition debt consists of deferred purchase price and promissory notes payable to sellers. At December 31, 2025, acquisition debt obligations were $6.2 million, with $0.6 million payable within 12 months. See Note 12 of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to acquisition debt. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report.

Senior Notes

At December 31, 2025, the principal amount of our 4.25% Senior Notes due in May 2029 (the “Senior Notes”) was $400.0 million. We have future interest payments on our outstanding balance of $59.5 million, with $17.0 million payable within 12 months. See Note 13 of Part II, Item 8. Financial Statements and Supplementary Data for additional information related to our Senior Notes. The information discussed therein is incorporated by reference into this Part I, Item 1 of this Annual Report.

Off-Balance Sheet Arrangements

At December 31, 2025, our off-balance sheet arrangements were as follows:

Non-compete agreements - We have various non-compete agreements with former owners and employees of businesses we have acquired. These agreements are generally for one to ten years and provide for periodic payments over the term of the agreements. We have future payments on our non-compete agreements of $3.1 million, with $1.2 million payable within 12 months.

Consulting agreements - We have various consulting agreements with former owners of businesses we have acquired. Payments for such agreements are generally not made in advance. These agreements are generally for one to ten years and provide for bi-weekly or monthly payments. We have future payments on our consulting agreements of $2.2 million, with $1.0 million payable within 12 months.

27

Employment agreements - We have employment agreements with our executive officers. These agreements are generally for two to five years and provide for participation in various incentive compensation arrangements. These agreements generally renew automatically on an annual basis after their initial term has expired. We have future payments on our employment agreements of $3.8 million, all of which is payable within 12 months.

Letter of credit - We have one letter of credit for $2.2 million under the Credit Facility, which secures our obligations under our various self-insurance policies in the event we are unable to meet the self-insurance portion of our claim payment obligations. As we already have reserves recorded for our self-insurance claims costs, these do not represent additional liabilities. The letter of credit will expire on November 25, 2026 and is expected to automatically renew annually.

The obligations related to our off-balance sheet arrangements are significant to our future liquidity; however, although we can provide no assurances, we anticipate that these obligations will be funded from cash provided from our operating activities. If we are not able to meet these obligations with cash provided by our operating activities, we may be required to access the capital markets or draw down on our Credit Facility, both of which may be more difficult to access. See Part II, Item 8, Financial Statements and Supplementary Data, Notes 12 and 15 to our Consolidated Financial Statements for further detail of our letter of credit and off-balance sheet agreements, respectively.

FINANCIAL HIGHLIGHTS

Below are our consolidated financial highlights (in thousands except for volumes and averages):

Year ended December 31,

2025

2024

Inc/(Dec)

% Change

Total revenue

$

417,440 

$

404,198 

$

13,242 

3.3 

%

Funeral contracts

43,523 

44,103 

(580)

(1.3)

%

Average revenue per funeral contract excluding preneed interest

$

5,693 

$

5,549 

$

144 

2.6 

%

Preneed interment rights (property) sold

14,573 

14,523 

50 

0.3 

%

Average price per preneed interment right sold

$

5,807 

$

5,374 

$

433 

8.1 

%

Gross profit

$

146,676 

$

143,390 

$

3,286 

2.3 

%

Net income

$

51,507 

$

32,953 

$

18,554 

56.3 

%

Revenue in 2025 increased $13.2 million compared to 2024, primarily as a result of a 0.3% increase in preneed interment rights (property) sold and an 8.1% increase in the average price per preneed interment right sold. Additionally, we experienced a 2.6% increase in the average revenue per funeral contract, which was partially offset by a 1.3% decrease in funeral contract volume.

Gross profit in 2025 increased $3.3 million compared to 2024, primarily due to the increases in revenue from both our segments, as well as lower operating expenses.

Net income in 2025 increased $18.6 million compared to 2024, primarily due to a $10.4 million decrease in general, administrative, and other expenses, as 2024 is comprised of one-time costs related to executive severance payments and the Company’s review of strategic alternatives, a $3.3 million increase in gross profit contribution from our businesses, a $2.2 million decrease in loss on divestitures and impairment charges and a $3.7 million decrease in interest expense, offset by a $1.6 million increase in income tax expense.

Further discussion of general, administrative and other expenses, net loss on divestitures and impairment charges, interest expense, income taxes and other components of income and expenses are presented under “Other Financial Statement Items.”

REPORTING AND NON-GAAP FINANCIAL MEASURES

We also present our financial performance in our “Condensed Operating and Financial Trend Report” (“Trend Report”) as reported in our earnings release for the three months ended December 31, 2025, dated February 25, 2026, and discussed in the corresponding earnings conference call. This Trend Report is used as a supplemental financial statement by management and investors to compare our current financial performance with our previous results and with the performance of other companies. Additionally, management employs segment gross profit for product pricing evaluation and uses segment adjusted operating profit to assess each segment’s performance by comparing results. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP. The Trend Report is a non-GAAP statement that also provides insight into underlying trends in our business.

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Below is a reconciliation of gross profit (a GAAP financial measure) to adjusted operating profit (a non-GAAP financial measure) (in thousands):

Year Ended December 31,

2025

2024

Gross profit

$

146,676 

$

143,390 

Cemetery property amortization

9,388 

8,168 

Field depreciation expense

13,167 

13,729 

Regional and unallocated funeral and cemetery costs

17,747 

15,364 

Adjusted operating profit(1)

$

186,978 

$

180,651 

(1)

Adjusted operating profit is defined as gross profit plus cemetery property amortization, field depreciation expense, and regional and unallocated funeral and cemetery costs.

Our operations are reported in two business segments: Funeral Home and Cemetery. Below is a breakdown of adjusted operating profit (a non-GAAP financial measure) by segment (in thousands):

Year Ended December 31,

2025

2024

Funeral Home

$

112,004 

$

107,990 

Cemetery

74,974 

72,661 

Adjusted operating profit

$

186,978 

$

180,651 

Adjusted operating profit margin(1)

44.8%

44.7%

(1)

Adjusted operating profit margin is defined as adjusted operating profit as a percentage of revenue.

Further discussion of adjusted operating profit for our funeral home and cemetery segments is presented under “Results of Operations.”

YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024

Results of Operations

The following is a discussion of our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The term “operating” in the funeral home and cemetery segments refers to all funeral homes and cemeteries that we owned and operated in the current reporting period, excluding certain funeral home and cemetery businesses that we have divested in such period.

The term “divested” when discussed in the funeral home segment, refers to thirteen funeral homes we sold and two funeral homes we merged with other businesses we own in existing markets during the year ended December 31, 2025 and six funeral homes we sold and three funeral home we merged with another business we own in an existing market during the year ended December 31, 2024.

The term “divested” when discussed in the cemetery segment, refers to four cemetery we sold during the year ended December 31, 2025 and one cemetery we sold during the year ended December 31, 2024.

The term “ancillary” in the funeral home segment represents our flower shop, monument business, pet cremation business and online cremation businesses.

Cemetery property amortization, field depreciation expense, and regional and unallocated funeral and cemetery costs, are not included in adjusted operating profit, a non-GAAP financial measure. Adding back these items will result in gross profit, a GAAP financial measure.

29

Funeral Home Segment

The following table sets forth certain information regarding our revenue and adjusted operating profit for our funeral home operations (in thousands):

Year Ended December 31,

2025

2024

Inc/(Dec)

% Change

Revenue:

Operating

$

239,601 

$

230,954 

$

8,647 

3.7 

%

Divested

8,166 

13,778 

(5,612)

(40.7)

%

Ancillary

3,608 

4,322 

(714)

(16.5)

%

Other

17,837 

14,060 

3,777 

26.9 

%

Total

$

269,212 

$

263,114 

$

6,098 

2.3 

%

Adjusted operating profit

Operating

$

94,617 

$

91,752 

$

2,865 

3.1 

%

Divested

1,765 

3,402 

(1,637)

(48.1)

%

Ancillary

552 

673 

(121)

(18.0)

%

Other

15,070 

12,163 

2,907 

23.9 

%

Total

$

112,004 

$

107,990 

$

4,014 

3.7 

%

The following measures reflect significant operating metrics over the comparative period:

Contract volume

41,579 

40,652 

927 

2.3 

%

Average revenue per contract, excluding preneed funeral trust earnings

$

5,763 

$

5,681 

$

82 

1.4 

%

Average revenue per contract, including preneed funeral trust earnings

$

5,924 

$

5,854 

$

70 

1.2 

%

Cremation rate

60.8%

59.9%

0.9%

1.7 

%

Funeral home operating revenue increased $8.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in operating revenue was primarily driven by a 1.4% increase in the average revenue per contract excluding preneed interest as well as a 2.3% increase in contract volume. The increase in revenue is driven by our success in implementing our enhanced pricing strategy through 2025, which contributed to the increase in average revenue per funeral contract.

Funeral home adjusted operating profit for the year ended December 31, 2025, increased $2.9 million when compared to the same period in 2024, reflecting our ongoing focus on cost efficiency and operational improvements. The comparable adjusted operating profit margin decreased 20 basis points to 39.5%, driven by 0.2% increase in operating expenses as a percentage of revenue. Key expense increases include facilities and grounds expense, general and administrative expenses, salaries and benefits, and investment expenses. These increases were partially offset by decreases in transportation expenses, cost of merchandise, and facilities and grounds insurance.

Ancillary revenue decreased $0.7 million, while ancillary adjusted operating profit decreased $0.1 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in ancillary revenue is primarily due to a decline in our online cremation business.

Other revenue and other adjusted operating profit, which consists of preneed funeral insurance commissions and earnings from delivered preneed funeral trust and insurance contracts, increased $3.8 million and $2.9 million, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024. These increases are primarily due to the increase in our general agency commission income earned on the sale of preneed insurance policies as we continue to focus on growth of our preneed funeral sales through our strategic partnership with a national insurance provider that began during the second quarter of 2023.

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Cemetery Segment

The following table sets forth certain information regarding our revenue and adjusted operating profit for our cemetery operations (in thousands):

Year Ended December 31,

2025

2024

Inc/(Dec)

% Change

Revenue:

Operating

$

130,631 

$

120,060 

$

10,571 

8.8 

%

Divested

1,383 

5,191 

(3,808)

(73.4)

%

Other

16,214 

15,833 

381 

2.4 

%

Total

$

148,228 

$

141,084 

$

7,144 

5.1 

%

Adjusted operating profit

Operating

$

58,653 

$

55,800 

$

2,853 

5.1 

%

Divested

430 

1,403 

(973)

(69.4)

%

Other

15,891 

15,458 

433 

2.8 

%

Total

$

74,974 

$

72,661 

$

2,313 

3.2 

%

The following measures reflect the significant operating metrics over this comparative period:

Preneed revenue as a percentage of operating revenue

70.8%

70.3%

0.5%

0.7 

%

Preneed revenue (in thousands)

$

92,468 

$

84,368 

$

8,100 

9.6 

%

Atneed revenue (in thousands)

$

38,163 

$

35,692 

$

2,471 

6.9 

%

Number of preneed interment rights sold

14,407 

13,910 

497 

3.6 

%

Average price per interment right sold

$

5,836 

$

5,486 

$

350 

6.4 

%

Cemetery operating revenue increased $10.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily as a result of a 6.4% increase in the average price per preneed interment right sold coupled with a 3.6% increase in the number of preneed interment rights sold. Cemetery atneed revenue, which represents approximately 29% of our total operating revenue, increased $2.5 million for the year ended December 31, 2025, compared to the same period of the prior year, primarily due to a 17.1% increase in atneed property sold as well as a 3.4% increase in atneed merchandise and service that was delivered within the period.

Cemetery adjusted operating profit increased $2.9 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The comparable operating profit margin decreased 160 basis points to 44.9%. Operating expenses as a percentage of operating revenue increased 1.6%, driven by increases in key expenses such as promotional expenses, salaries and benefits, and allowance for credit losses.

Other revenue and other adjusted operating profit, which consist of preneed cemetery trust revenue and preneed cemetery finance charges, increased $0.4 million and $0.4 million, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is due to a more favorable tax rate on perpetual care income taxes in 2025 compared to 2024.

Cemetery property amortization. Cemetery property amortization totaled $9.4 million for the year ended December 31, 2025, an increase of $1.2 million compared to the year ended December 31, 2024, primarily driven by the increase in property sold across our cemetery portfolio.

Field depreciation. Depreciation expense for our field businesses totaled $13.2 million for the year ended December 31, 2025, a decrease of $0.6 million compared to the year ended December 31, 2024, primarily driven by our business decision to lease vehicles rather than purchase them.

Regional and unallocated funeral and cemetery costs. Regional and unallocated funeral and cemetery costs consist of salaries and benefits for regional management, field incentive compensation and other related costs for field infrastructure. Regional and unallocated funeral and cemetery costs totaled $17.7 million for the year ended December 31, 2025, a increase of $2.4 million compared to the year ended December 31, 2024, primarily driven by an increase in leadership and development expenses.

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Other Financial Statement Items

General, administrative, and other. General, administrative, and other expenses, which include salaries and benefits and cash and equity incentive compensation for our Houston support office, totaled $48.6 million for the year ended December 31, 2025, a decrease of $10.4 million compared to the year ended December 31, 2024, primarily driven by a $6.2 million decrease in salary and benefits expenses and cash and equity incentive compensation costs, primarily driven by the termination expense of our founder and former Executive Chairman of the Board pursuant to his Transition Agreement and termination expense for our former Chief Financial Officer pursuant to his Separation and Release Agreement recorded in the prior year, and an $6.2 million decrease in other professional fees. These decreases were offset by a $1.0 million increase in depreciation and amortizations, $0.6 million increase in computer maintenance and licenses, and a $0.4 million increase in various other general and administrative expenses.

Net loss on divestitures and impairment charges. The components of Net loss on divestitures and impairment charges are as follows (in thousands):            

Year ended December 31,

2025

2024

Impairment of goodwill, intangibles, and PPE

$

1,761

$

637

Net (gain) loss on divestitures

(1,451)

1,224

Net loss on disposals of fixed assets

61

719

Total

$

371

$

2,580

During the year ended December 31, 2025, we sold thirteen funeral homes and four cemeteries for an aggregate gain of $1.5 million. We also recognized an impairment of $1.8 million on assets held for sale during the year ended December 31, 2025.

During the year ended December 31, 2024, we sold six funeral homes and one cemetery for a loss of $1.2 million. We also recognized an impairment of $0.6 million as a result of our 2024 qualitative assessment of tradenames and an impairment of $40 thousand related to property, plant, and equipment for assets held for sale.

Interest expense. Interest expense related to its respective debt arrangement is as follows (in thousands):

Year ended December 31,

2025

2024

Senior Notes

$

17,722

$

17,692

Credit Facility

9,301

13,860

Finance leases

967

506

Acquisition debt

367

406

Other

8

(389)

Total

$

28,365

$

32,075

Net gain on property damage, net of insurance claims. During the year ended December 31, 2024, we recorded a $0.4 million gain, net of insurance proceeds, for damages from Hurricane Ian, which occurred during the third quarter of 2022.

Other, net. During the year ended December 31, 2025, we recorded a $1.0 million gain on the sale of other real property not used in business operations. We did not record any gain or loss activity during the year ended December 31, 2024.

Income taxes. Income tax expense totaled $18.8 million for the year ended December 31, 2025, an increase of $1.6 million compared to the year ended December 31, 2024. Our operating tax rate before discrete items was 31.6% and 32.1% for the year ended December 31, 2025 and 2024, respectively.

We recorded a net discrete tax benefit of $3.4 million for the year ended December 31, 2025, a decrease of $4.5 million compared to the year ended December 31, 2024. The net discrete tax benefit for the year ended December 31, 2025, is primarily due to vesting of long-term equity compensation, stock option exercises. Our effective tax rate was 26.7% and 34.2% for years ended December 31, 2025 and 2024, respectively.

At December 31, 2025, our unrecognized tax benefit reserve for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property for the benefit derived from carrying back losses to tax years with a higher effective tax rate than the current 21.0% rate. Our unrecognized tax benefit reserve for the years ended December 31, 2025 and 2024 was $3.6 million and $3.5 million, respectively.

See Part II, Item 8, Financial Statements and Supplementary Data, Notes 1 and 16 for additional information regarding income taxes.

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CRITICAL ACCOUNTING ESTIMATES

The preparation of our Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Understanding our accounting policies and the extent to which our management uses judgment, assumptions and estimates in applying these policies is integral to understanding our Consolidated Financial Statements. Our critical accounting policies are more fully described in Part II, Item 8 “Financial Statements and Supplementary Data” in Note 1.

We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates and assumptions about complex and inherently uncertain matters and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. Historical performance should not be viewed as indicative of future performance because there can be no assurance the margins, operating income and net earnings, as a percentage of revenue, will be consistent from period to period. We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as appropriate based on changing conditions.

Goodwill

Our quantitative goodwill impairment test involves estimates and management judgment. In the quantitative analysis, we compare the fair value of each reporting unit to its carrying value, including goodwill. We determine fair value for each reporting unit using an income approach, weighted 80%, and two market approaches, weighted 10% each. Our methodology for determining an income-based fair value is based on discounting projected future cash flows. The projected future cash flows include assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows discounted at our weighted average cost of capital based on market participant assumptions. Our first methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples of comparable companies operating in the same industry as the individual reporting units. Our second market approach methodology utilizes the guideline transaction method, in which transaction multiples are derived from acquisitions of controlling interests in companies engaged in the same or similar lines of business as the reporting units. In accordance with the guidance, if the fair value of the reporting unit is less than its carrying amount an impairment charge is recorded in an amount equal to the difference.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 4 for additional information related to goodwill.

Business Combinations

Determining the fair value of identifiable assets, particularly intangibles and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. To the extent that information not available to us at the closing date subsequently becomes available during the allocation period, we may adjust goodwill, intangible assets, and other assets or liabilities associated with the acquisition.

When we acquire a cemetery, we utilize an internal and external approach to determine the fair value of the cemetery property. From an external perspective, we obtain an accredited appraisal to provide reasonable assurance for property existence, property availability (unrestricted) for development, property lines, available spaces to sell, identifiable obstacles or easements and general valuation inclusive of known variables in that market. From an internal perspective, we conduct a detailed analysis of the acquired cemetery property using other cemeteries in our portfolio as a benchmark. This provides the added benefit of relevant data that is not available to third-party appraisers. Through this thorough internal process, the Company is able to identify viable costs of property based on historical experience, particular markets and demographics, reasonable margins, practical retail prices, and park infrastructure and condition.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 3 for additional information related to business combinations.

RECENT ACCOUNTING PRONOUNCEMENTS, ACCOUNTING CHANGES AND OTHER REGULATIONS

For discussion of recent accounting pronouncements and accounting changes, see Part II, Item 8, Financial Statements and Supplementary Data, Note 2.

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