Carriage Services Inc.

Overview Key strengths Key risks Steady long-term drivers of demand including the death rate, aging population, and memorialization trends. Adjusted debt to EBITDA at the high end of the range for the current rating. Good economies of scale relative to most of the industry. Acquisition-centric growth strategy and aggressive share repurchases. Relatively low customer price sensitivity. Consumer preferences shifting to lower cost products and services. Low organic growth in the fragmented, mature funeral industry and low industry growth in cemeteries. Along with the rest of the death care industry, CSV has been a net beneficiary of the COVID-19 pandemic. While the industry faced significant funeral pricing pressure (low-double-digit percent decline) in the early months of the pandemic due to social

...Carriage Services Inc. (CSV) outperformed our expectations during the COVID-19 pandemic, but we expect revenue to moderate. Along with the rest of the death care industry, CSV has been a net beneficiary of the COVID-19 pandemic. While the industry faced significant funeral pricing pressure (low-double-digit percent decline) in the early months of the pandemic due to social distancing orders, this modest decline was more than offset by subsequent growth in funeral volume, driven by significant COVID-19-related deaths. In addition, preneed cemetery sales volume increased significantly in 2021 (6% growth in backlog of deferred revenue at cost)...

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