Standand&Poor's Rating Services' low-speculative-grade rating on Houston-based Carriage Services Inc. reflects its weak business risk profile, mainly due to the company's narrow focus in the highly fragmented and mature deathcare industry. This is only partly mitigated by the long-term predictability of the funeral home and cemetery business. The rating also reflects the persistence of the company's highly leveraged financial position as it continues to acquire smaller competitors. We expect, in light of the slow-growth trends of the deathcare industry and more cost conscious consumers, mid-single-digit revenue growth that should contribute to modest improvement in EBITDA margins in 2010 and 2011 which will also benefit from annual acquisitions of around $20 million. The company's weak business risk profile reflects
