Summary: Carriage Services Inc.

The low-speculative-grade rating on Carriage Services Inc. reflects the funeral home operator's significant financial burden in an industry that, although relatively predictable, is subject to operating uncertainties. Carriage's network of 136 funeral homes in 25 states and 32 cemeteries in 11 states makes the company the third-largest rated operator in North America, but still only 10% of the size of the largest operator, Service Corp. International (BB/Stable/--). Although Carriage has continued its focus on increasing net revenue per funeral and improving margins, it faced significant headwinds in 2008 as its cremation rate rose dramatically to 40% from 36% in 2007 amid relatively flat death rates. In addition, weak economic conditions negatively impacted cemetery sales. Price competition among providers also is

...The low-speculative-grade rating on Carriage Services Inc. reflects the funeral home operator's significant financial burden in an industry that, although relatively predictable, is subject to operating uncertainties. Carriage's network of 136 funeral homes in 25 states and 32 cemeteries in 11 states makes the company the third-largest rated operator in North America, but still only 10% of the size of the largest operator, Service Corp. International (##/Stable/--). Although Carriage has continued its focus on increasing net revenue per funeral and improving margins, it faced significant headwinds in 2008 as its cremation rate rose dramatically to 40% from 36% in 2007 amid relatively flat death rates. In addition, weak economic conditions negatively impacted cemetery sales. Price competition among providers also is considerable. Carriage has employed an aggressive financial strategy; in 2007 Carriage severely decreased its liquidity by acquiring $49 million of funeral home and cemetery...

Summary