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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________


Commission File Number:			1-11961

CARRIAGE SERVICES, INC.

(Exact name of registrant as specified in its charter)


Delaware			76-0423828
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3040 Post Oak Boulevard, Suite 300

Houston, Texas, 77056

(Address of principal executive offices)

(713) 332-8400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	CSV	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Common Stock, $.01 par value per share, outstanding as of April 25, 2025 was 15,692,935.

CARRIAGE SERVICES, INC.

INDEX


			Page
PART I – FINANCIAL INFORMATION

Item 1. Financial Statements			3

Unaudited Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024			3

Unaudited Consolidated Statements of Operations for the Three Months ended March 31, 2025 and 2024			4

Unaudited Consolidated Statements of Cash Flows for the Three Months ended March 31, 2025 and 2024			5

Unaudited Consolidated Statements of Changes in Stockholders' Equity for the Three Months ended March 31, 2025 and 2024			6

Condensed Notes to Consolidated Financial Statements			7

Cautionary Statement on Forward–Looking Statements			34

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			36

Item 3. Quantitative and Qualitative Disclosures About Market Risk			46

Item 4. Controls and Procedures			47

PART II – OTHER INFORMATION

Item 1. Legal Proceedings			48

Item 1A. Risk Factors			48

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			49

Item 3. Defaults Upon Senior Securities			49

Item 4. Mine Safety Disclosures			49

Item 5. Other Information			49

Item 6. Exhibits			49

SIGNATURE			50

INDEX OF EXHIBITS			51

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands, except share data)





	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	4,643	$	1,165
Accounts receivable, net	32,590		30,193
Inventories	7,857		7,920
Prepaid and other current assets	4,719		4,123
Current assets held for sale	91		1,135
Total current assets	49,900		44,536
Preneed cemetery trust investments	103,817		98,120
Preneed funeral trust investments	108,290		106,219
Preneed cemetery receivables, net	50,034		50,958
Receivables from preneed funeral trusts, net	22,239		22,372
Property, plant and equipment, net	273,422		273,004
Cemetery property, net	109,283		109,576
Goodwill	410,703		414,859
Intangible and other non-current assets, net	40,744		40,427
Operating lease right-of-use assets	14,378		14,953
Cemetery perpetual care trust investments	88,624		85,103
Non-current assets held for sale	3,795		19,453
Total assets	$	1,275,229	$	1,279,580
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:



Current portion of debt and lease obligations	$	4,192	$	3,914
Accounts payable	14,107		15,427
Accrued and other liabilities	34,058		38,460
Current liabilities held for sale	154		240
Total current liabilities	52,511		58,041
Acquisition debt, net of current portion	4,856		4,895
Long-term liabilities held for sale	1,963		13,842
Credit facility	118,470		135,382

Senior notes	396,774		396,597
Obligations under finance leases, net of current portion	9,152		6,045
Obligations under operating leases, net of current portion	13,379		14,035
Deferred preneed cemetery revenue	60,214		61,767
Deferred preneed funeral revenue	39,152		39,261
Deferred tax liability	53,893		51,429
Other long-term liabilities	1,058		1,179
Deferred preneed cemetery receipts held in trust	103,817		98,120
Deferred preneed funeral receipts held in trust	108,290		106,219
Care trusts’ corpus	88,638		84,218
Total liabilities	1,052,167		1,071,030
Commitments and contingencies:
Stockholders’ equity:
Common stock, $0.01 par value; 80,000,000 shares authorized and 27,321,003 and 26,881,355 shares issued, respectively and 15,692,935 and 15,253,537 shares outstanding, respectively	273		269
Additional paid-in capital	237,407		243,825
Retained earnings	264,135		243,209
Treasury stock, at cost; 11,627,818 shares	(278,753)		(278,753)
Total stockholders’ equity	223,062		208,550
Total liabilities and stockholders’ equity	$	1,275,229	$	1,279,580

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share data)




	Three months ended March 31,
		2025		2024
Revenue:
Service revenue		$	53,010	$	49,699
Property and merchandise revenue		45,586		45,502
Other revenue		8,473		8,292
		107,069		103,493
Field costs and expenses:
Cost of service		24,577		23,708
Cost of merchandise		32,609		31,950
Cemetery property amortization		1,828		1,756
Field depreciation expense		3,322		3,467
Regional and unallocated funeral and cemetery costs		5,235		3,842
Other expenses		1,656		1,508
		69,227		66,231
Gross profit		37,842		37,262
Corporate costs and expenses:
General, administrative and other		12,048		16,240

Net (gain) loss on divestitures, disposals and impairments charges		(5,770)		1,545
Operating income		31,564		19,477

Interest expense		7,298		8,712



Other, net		(1,988)		43
Income before income taxes		26,254		10,722
Expense for income taxes		8,191		3,519
(Benefit) expense related to discrete income tax items		(2,863)		230
Total expense for income taxes		5,328		3,749
Net income		$	20,926	$	6,973

Basic earnings per common share:		$	1.35	$	0.46
Diluted earnings per common share:		$	1.34	$	0.45

Dividends declared per common share:		$	0.1125	$	0.1125
Weighted average number of common and common equivalent shares outstanding:
Basic		15,243		14,876
Diluted		15,389		15,309

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)


	Three months ended March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	20,926	$	6,973
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,401		5,460
Provision for credit losses	1,074		782
Stock-based compensation expense	1,753		489
Deferred income tax (benefit) expense	2,464		(2,342)
Amortization of intangibles	335		332
Amortization of debt issuance costs	127		176
Amortization and accretion of debt	138		132

Net (gain) loss on divestitures, disposals and impairment charges	(5,770)		1,545

Gain on sale of excess real property	(1,988)		—
Changes in operating assets and liabilities that provided (used) cash:
Accounts and preneed receivables	(2,585)		(1,800)
Inventories, prepaid and other current assets	(537)		814
Intangible and other non-current assets	(633)		(834)
Preneed funeral and cemetery trust investments	(8,005)		(15,255)
Accounts payable	(2,840)		862
Accrued and other liabilities	(3,544)		4,831
Deferred preneed funeral and cemetery revenue	(1,534)		2,267
Deferred preneed funeral and cemetery receipts held in trust	9,010		15,271
Net cash provided by operating activities	13,792		19,703

Cash flows from investing activities:

Proceeds from divestitures and sale of other assets	18,660		10,877
Proceeds from insurance claims	—		46
Capital expenditures	(3,163)		(3,551)
Net cash provided by investing activities	15,497		7,372

Cash flows from financing activities:
Borrowings from the credit facility	7,100		13,600
Payments against the credit facility	(24,100)		(38,600)





Payments on acquisition debt and obligations under finance leases	(148)		(152)

Proceeds from the exercise of stock options and employee stock purchase plan contributions	688		347
Taxes paid on restricted stock and performance award vestings and exercise of stock options	(7,629)		(418)
Dividends paid on common stock	(1,722)		(1,686)

Net cash used in financing activities	(25,811)		(26,909)


Net increase in cash and cash equivalents	3,478		166
Cash and cash equivalents at beginning of period	1,165		1,523
Cash and cash equivalents at end of period	$	4,643	$	1,689

The accompanying notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited and in thousands)


	Three months ended March 31, 2025
	Shares Outstanding	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Total
Balance - December 31, 2024	15,254	$	269	$	243,825	$	243,209	$	(278,753)	$	208,550
Net income	—	—		—		20,926		—		20,926
Issuance of common stock from employee stock purchase plan	11	—		367		—		—		367
Issuance of common stock to directors and board advisor	2	—		77		—		—		77
Issuance of common stock	271	3		(3)		—		—		—
Issuance of restricted common stock	115	1		(1)		—		—		—
Exercise of stock options	77	—		321		—		—		321
Restricted common stock, performance awards and stock options surrendered for taxes paid	(49)	—		(7,629)		—		—		(7,629)
Stock-based compensation expense	—	—		1,676		—		—		1,676
Dividends on common stock	—	—		(1,722)		—		—		(1,722)


Other	12	—		496		—		—		496
Balance - March 31, 2025	15,693	$	273	$	237,407	$	264,135	$	(278,753)	$	223,062


	Three months ended March 31, 2024
	Shares Outstanding	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Total
Balance - December 31, 2023	15,000	$	266	$	241,291	$	210,256	$	(278,753)	$	173,060
Net income	—	—		—		6,973		—		6,973
Issuance of common stock from employee stock purchase plan	16	—		347		—		—		347
Issuance of common stock to directors and board advisor	4	—		113		—		—		113

Issuance of restricted common stock	157	2		(2)		—		—		—

Restricted common stock and stock options surrendered for taxes paid	(43)	—		(418)		—		—		(418)
Stock-based compensation expense	—	—		376		—		—		376
Dividends on common stock	—	—		(1,686)		—		—		(1,686)


Other	31	—		790		—		—		790
Balance - March 31, 2024	15,165	$	268	$	240,811	$	217,229	$	(278,753)	$	179,555

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Carriage Services, Inc. (“Carriage,” the “Company,” “we,” “us,” or “our”) is a leading provider of funeral and cemetery services and merchandise in the United States. Our operations are reported in two business segments: Funeral Home Operations, which currently accounts for approximately 70% of our total revenue and Cemetery Operations, which currently accounts for approximately 30% of our total revenue. At March 31, 2025, we operated 160 funeral homes in 25 states and 28 cemeteries in 10 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.

Principles of Consolidation and Interim Condensed Disclosures

Our unaudited Consolidated Financial Statements include the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Our interim Consolidated Financial Statements are unaudited, but include all adjustments, which consist of normal, recurring accruals, that are necessary for a fair presentation of our financial position and results of operations as of and for the interim periods presented.

There have been no material changes in our accounting policies previously disclosed in Part II, Item 8 “Financial Statements and Supplementary Data” in Note 1 in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition, our unaudited Consolidated Financial Statements have been prepared in a manner consistent with the accounting principles described in our Annual Report on Form 10-K for the year ended December 31, 2024 unless otherwise disclosed herein, and should be read in conjunction therewith.

Use of Estimates

The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, we evaluate our critical estimates and judgments, which include those related to the impairment of goodwill and the fair value measurements used in business combinations. 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.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventory

Inventory consists primarily of caskets, outer burial containers and cemetery monuments and markers and is recorded at the lower of its cost basis or net realizable value. Inventory is relieved using specific identification in fulfillment of performance obligations on our contracts.

Held for Sale

At March 31, 2025, the assets and liabilities of non-core funeral home and cemetery businesses expected to be sold within the next twelve months, which have met the criteria for such classification, have been classified as held for sale.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The table below presents the carrying amounts of the assets and liabilities included as part of the expected sale (in thousands):


	March 31, 2025		December 31, 2024
Accounts receivable, net	$	36	$	833
Inventories	52		302
Prepaid and other current assets	3		—
Current assets held for sale	$	91	$	1,135

Preneed cemetery trust investments	$	1,059	$	4,876
Preneed funeral trust investments	405		2,197
Preneed cemetery receivables, net	3		1,671
Receivables from funeral preneed trusts, net	27		—
Property, plant and equipment, net	1,554		4,898
Cemetery property, net	128		3,362
Intangible and other non-current assets, net	223		215
Operating lease right-of-use assets	74		—
Cemetery perpetual care trust investments	322		2,234
Non-current assets held for sale	$	3,795	$	19,453

Current portion of operating lease obligations	$	22	$	—
Accounts payable	18		94
Accrued and other liabilities	114		146
Current liabilities held for sale	$	154	$	240

Obligations under operating leases, net of current portion	$	53	$	—
Deferred preneed cemetery revenue	97		3,517
Deferred preneed funeral revenue	27		1,018
Deferred preneed cemetery receipts held in trust	1,059		4,876
Deferred preneed funeral receipts held in trust	405		2,197
Care trusts’ corpus	322		2,234
Long-term liabilities held for sale	$	1,963	$	13,842

Property, Plant and Equipment

Property, plant and equipment is comprised of the following (in thousands):


	March 31, 2025		December 31, 2024
Land	$	85,462	$	86,609
Buildings and improvements	264,733		265,231
Furniture, equipment and vehicles	70,863		72,052
Property, plant and equipment, at cost	421,058		423,892
Less: accumulated depreciation	(146,082)		(145,990)
Property, plant and equipment, net	$	274,976	$	277,902
Less: Held for sale	(1,554)		(4,898)
Property, plant and equipment, net	$	273,422	$	273,004

During the three months ended March 31, 2025, we sold two funeral homes and three cemeteries that had a carrying value of property, plant and equipment of $3.4 million, which was included in the gain on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, more fully described in Note 4 to the Consolidated Financial Statements.

Additionally, during the three months ended March 31, 2025, we sold real property for $2.9 million, with a carrying value of $0.9 million, resulting in a $2.0 million gain on the sale, which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the three months ended March 31, 2024, we sold six funeral homes and one cemetery that had a carrying value of property, plant and equipment of $3.1 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Our growth and maintenance capital expenditures totaled $1.6 million for both the three months ended March 31, 2025 and 2024. In addition, we recorded depreciation expense of $3.5 million and $3.6 million for the three months ended March 31, 2025 and 2024, respectively.

Cemetery Property

Cemetery property was $109.4 million and $112.9 million, net of accumulated amortization of $71.4 million and $72.6 million at March 31, 2025 and December 31, 2024, respectively. When cemetery property is sold, the value of the cemetery property (interment right costs) is expensed as amortization using the specific identification method in the period in which the sale of the interment right is recognized as revenue. Our growth capital expenditures for cemetery property development totaled $1.6 million and $2.0 million for the three months ended March 31, 2025 and 2024, respectively. We recorded amortization expense for cemetery interment rights of $1.8 million for both the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025, we sold three cemeteries that had a carrying value of cemetery property of $3.3 million, which was included in the gain on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, more fully described in Note 4 to the Consolidated Financial Statements.

During the three months ended March 31, 2024, we sold one cemetery that had a carrying value of cemetery property of $0.8 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Income Taxes

Income tax expense was $5.3 million and $3.7 million for the three months ended March 31, 2025 and 2024, respectively. Our operating tax rate before discrete items was 31.2% and 32.8% for the three months ended March 31, 2025 and 2024, respectively.

Subsequent Events

We have evaluated events and transactions during the period subsequent to March 31, 2025 through the date the financial statements were issued for potential recognition or disclosure in the accompanying consolidated financial statements covered by this report.

2. RECENTLY ISSUED ACCOUNTING STANDARDS

Income Taxes

In December 2023, the FASB issued ASU, Income Taxes - Improvements to Income Tax Disclosures to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information. The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation; and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The amendments in this update also require that all entities disclose on an annual basis (1) the amount of net income taxes paid disaggregated by federal and state taxes; and (2) the amount of net income taxes paid disaggregated by individual jurisdictions in which net income taxes paid is equal to or greater than five percent of total net income taxes paid. The amendments are effective for annual periods beginning after December 15, 2024 and therefore were effective for us for our fiscal year beginning January 1, 2025 and for interim periods within our fiscal year beginning January 1, 2026. The adoption had no material impact on our consolidated financial statements as it modified disclosure requirements only.

Accounting Pronouncements Not Yet Adopted

Expense Disaggregation

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The amendments in this update require, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We expect the adoption will have no material impact on our consolidated financial statements as it modifies disclosure requirements only.

3. GOODWILL

The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands):


	March 31, 2025		December 31, 2024
Goodwill at the beginning of the period	$	414,859	$	423,643

Decrease in goodwill related to divestitures	(4,156)		(8,784)

Goodwill at the end of the period	$	410,703	$	414,859

During the three months ended March 31, 2025, we allocated $4.2 million of goodwill to the sale of two funeral homes and three cemeteries which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, of which $2.6 million was allocated to our funeral home segment and $1.6 million was allocated to our cemetery segment.

During the three months ended March 31, 2024, we allocated $8.7 million of goodwill to the sale of six funeral homes and one cemetery which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, of which $7.8 million was allocated to our funeral homes segment and $1.0 million was allocated to our cemetery segment.

4. DIVESTED OPERATIONS

During the three months ended March 31, 2025, we sold two funeral homes and three cemeteries for an aggregate of $15.8 million. During the three months ended March 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $10.9 million.

The operating results of these divested funeral homes and cemeteries are reflected on our Consolidated Statements of Operations as shown in the table below (in thousands):


	Three months ended, March 31,
		2025		2024
Revenue		$	1,653	$	1,151

Operating income		476		122
Net gain (loss) on divestitures(1)		5,937		(1,501)
Income tax (expense) benefit		(2,001)		452
Net gain (loss) from divested operations, after tax		$	4,412	$	(927)



(1)			Net loss on divestitures is recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

5. RECEIVABLES

Accounts Receivable

Our funeral receivables are recorded in Accounts receivable, net and primarily consist of amounts due for funeral services already performed.

Atneed cemetery receivables and preneed cemetery receivables with payments expected to be received within one year from the balance sheet date are also recorded in Accounts receivable, net. Preneed cemetery receivables with payments expected to be received beyond one year from the balance sheet date are recorded in Preneed cemetery receivables, net.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounts receivable is comprised of the following (in thousands):


	March 31, 2025
Column1	Funeral		Cemetery		Corporate		Held for Sale		Total
Trade and financed receivables	$	8,104	$	23,963	$	—	$	(36)	$	32,031
Other receivables	585		343		1,080		—		2,008
Allowance for credit losses	(303)		(1,146)		—		—		(1,449)
Accounts receivable, net	$	8,386	$	23,160	$	1,080	$	(36)	$	32,590


	December 31, 2024
Column1	Funeral		Cemetery		Corporate		Held for Sale		Total
Trade and financed receivables	$	7,085	$	24,355	$	—	$	(833)	$	30,607
Other receivables	557		345		—		—		902
Allowance for credit losses	(302)		(1,014)		—		—		(1,316)
Accounts receivable, net	$	7,340	$	23,686	$	—	$	(833)	$	30,193

Other receivables include supplier rebates, commissions due from third-party insurance companies and perpetual care income receivables. We do not provide an allowance for credit losses for these receivables as we have historically not had any collectability issues nor do we expect any in the foreseeable future.

The following table summarizes the activity in our allowance for credit losses by portfolio segment for the three months ended March 31, 2025 (in thousands):


	January 1, 2025		Provision for Credit Losses		Write Offs		Recoveries		March 31, 2025
Trade and financed receivables:
Funeral	$	(302)	$	(251)	$	412	$	(162)	$	(303)
Cemetery	(1,014)		(332)		200		—		(1,146)
Total allowance for credit losses on trade and financed receivables	$	(1,316)	$	(583)	$	612	$	(162)	$	(1,449)

Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheets of $9.7 million and $10.2 million at March 31, 2025 and December 31, 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of ten years for preneed funeral contracts.

Cemetery Receivables

Our cemetery receivables are comprised of the following (in thousands):


	March 31, 2025		December 31, 2024
Interment rights	$	79,440	$	79,436
Merchandise and services	12,480		13,128
Unearned finance charges	5,001		4,983
Cemetery receivables	$	96,921	$	97,547

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of our cemetery receivables are as follows (in thousands):


	March 31, 2025		December 31, 2024
Cemetery receivables	$	96,921	$	97,547
Less: unearned finance charges	(5,001)		(4,983)
Cemetery receivables, at amortized cost	$	91,920	$	92,564
Less: allowance for contract cancellation and credit losses	(3,447)		(3,018)
Less: balances due on undelivered cemetery preneed contracts	(15,619)		(13,576)
Less: amounts in accounts receivable	(22,817)		(23,341)
Preneed cemetery receivables, net including HFS	$	50,037	$	52,629
Less: Held for sale	(3)		(1,671)
Preneed cemetery receivables, net	$	50,034	$	50,958

The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the three months ended March 31, 2025 (in thousands):


	January 1, 2025		Provision for Credit Losses		Write Offs		March 31, 2025
Total allowance for credit losses on Preneed cemetery receivables, net	$	(2,004)	$	(491)	$	194	$	(2,301)

The amortized cost basis of our cemetery receivables by year of origination as of March 31, 2025 is as follows (in thousands):


	2025		2024		2023		2022		2021		Prior		Total
Total cemetery receivables, at amortized cost	$	11,923	$	43,549	$	19,397	$	10,910	$	4,283	$	1,858	$	91,920

The aging of past due cemetery receivables as of March 31, 2025 is as follows (in thousands):


	31-60 Past Due		61-90 Past Due		91-120 Past Due		>120 Past Due		Total Past Due		Current		Total
Recognized revenue	$	1,336	$	1,334	$	439	$	3,018	$	6,127	$	70,174	$	76,301
Deferred revenue	440		154		82		771		1,447		19,173		20,620
Total contracts	$	1,776	$	1,488	$	521	$	3,789	$	7,574	$	89,347	$	96,921

Balances due on undelivered preneed cemetery contracts have been reclassified to reduce Deferred preneed cemetery revenue on our Consolidated Balance Sheets. The transaction price allocated to preneed merchandise and service performance obligations that were unfulfilled were $15.6 million and $13.6 million at March 31, 2025 and December 31, 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of eight years for preneed cemetery contracts.

6. FAIR VALUE MEASUREMENTS

We evaluated our financial assets and liabilities for those that met the criteria of the disclosure requirements and fair value framework. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate the fair values of those instruments due to the short-term nature of the instruments. The fair values of our receivables on preneed cemetery contracts are impracticable to estimate because of the lack of a trading market and the diverse number of individual contracts with varying terms. Our acquisition debt and Credit Facility (as defined in Note 10) and Senior Notes (as defined in Note 11) are classified within Level 2 of the Fair Value Measurements hierarchy.

At March 31, 2025, the carrying value and fair value of our Credit Facility was $120.0 million. We believe that our Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and therefore, the carrying value of our Credit Facility approximates fair value. We estimate the fair value of our acquisition debt utilizing an income approach, which uses a present value calculation to discount payments based on current market rates as of the reporting date. At March 31, 2025, the carrying value of our acquisition debt was $5.4 million, which approximated its fair value. The fair value of our Senior Notes was $364.4 million at March 31, 2025, based on the last traded or broker quoted price.

We identified investments in fixed income securities, common stock and mutual funds presented within the preneed and perpetual care trust investments categories on our Consolidated Balance Sheets as having met the criteria for fair value measurement. Where quoted prices are available in an active market, investments held by the trusts are classified as Level 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

investments pursuant to the three-level valuation hierarchy. Our Level 1 investments include cash, common stock and equity mutual funds. Where quoted market prices are not available for the specific security, then fair values are estimated by using quoted prices of similar securities in active markets or inputs other than quoted prices that can corroborate observable market data. These investments are fixed income securities, including U.S. agency obligations, foreign debt, corporate debt, preferred stocks, certificates of deposit and fixed income mutual funds and other investments, all of which are classified within Level 2 of the valuation hierarchy.

In addition, we have an investment in a limited partnership fund, whose fair value has been estimated using the net asset value per share (“NAV”) practical expedient described in ASC 820-10-35-59, Fair Value Measurement of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) and therefore, has not been classified in the fair value hierarchy. The investment strategy of this fund is to generate attractive, risk-adjusted returns over a multi-year performance period through the construction of a concentrated portfolio of investments possessing certain distinct business attributes that suggest the potential for long-term value creation. The value of the investments in this fund cannot be liquidated at March 31, 2025 because the investments include restrictions that do not allow for liquidation until 2027. As of March 31, 2025, we do not have an unfunded commitment for this investment.

Furthermore, we have two investments in real estate debt and structured credit (“alternative investments”), whose fair value has been estimated using NAV and therefore, has not been classified in the fair value hierarchy. The investment strategy for these alternative investments is to create capital growth, income generation, and risk-adjusted returns. Capital growth is achieved by identifying high-potential investments that are appreciated over time. Income generation may involve dividends, rental income, or interest from various investments. Risk-adjusted returns focus on balancing potential profits with acceptable levels of risk, often through diversification and careful asset allocation. The real estate debt is approximately 39% of the total alternative investment and can be liquidated with a 40-day notice period and cannot exceed 5% of the total fund’s value. The structured credit is approximately 61% of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions. As of March 31, 2025, we do not have an unfunded commitment for these investments.

Our receivables from preneed funeral trusts represent assets in trusts which are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets. We account for these investments at cost. See Notes 7 and 8 to our Consolidated Financial Statements for the fair value hierarchy levels of our trust investments.

7. TRUST INVESTMENTS

Preneed trust investments represent trust fund assets that we are generally permitted to withdraw as the services and merchandise are provided to customers. Preneed funeral and cemetery contracts are secured by payments from customers, less amounts not required by law to be deposited into trust. These earnings are recognized in Other revenue on our Consolidated Statements of Operations, when a service is performed or merchandise is delivered. Trust management fees charged by our wholly owned registered investment advisory firm (“CSV RIA”) are included as revenue in the period in which they are earned. Our investments are diversified across multiple industry segments using a balanced allocation strategy to minimize long-term risk. We do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery.

Cemetery perpetual care trust investments represent a portion of the proceeds from the sale of cemetery property interment rights that we are required by various state laws to deposit into perpetual care trust funds. The income earned from these perpetual care trusts offsets maintenance expenses for cemetery property and memorials. This trust fund income is recognized in Other revenue.

Changes in the fair value of our trust fund assets (Preneed funeral, cemetery and perpetual care trust investments) are offset by changes in the fair value of our trust fund liabilities (Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus) and reflected in Other, net. There is no impact on earnings until such time the services are performed, or the merchandise is delivered, causing the contract to be withdrawn from the trust in accordance with state regulations and the gain or loss is allocated to the contract.

We rely on our trust investments to provide funding for the various contractual obligations that arise upon maturity of the underlying preneed contracts. Because of the long-term relationship between the establishment of trust investments and the required performance of the underlying contractual obligations, the impact of current market conditions that may exist at any given time is not necessarily indicative of our ability to generate profit on our future performance obligations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Preneed Cemetery Trust Investments

The components of Preneed cemetery trust investments on our Consolidated Balance Sheets are as follows (in thousands):


	March 31, 2025		December 31, 2024
Preneed cemetery trust investments, at market value	$	108,073	$	106,143
Less: allowance for contract cancellation	(3,197)		(3,147)
Preneed cemetery trust investments	$	104,876	$	102,996
Less: Held for sale	(1,059)		(4,876)
Preneed cemetery trust investments	$	103,817	$	98,120

The cost and market values associated with preneed cemetery trust investments at March 31, 2025 are detailed below (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	26,369	$	—	$	—	$	26,369
Fixed income securities:

U.S. agency obligations	2	526		—		(35)		491
Foreign debt	2	5,296		710		(8)		5,998
Corporate debt	2	4,278		140		(140)		4,278
Preferred stock	2	359		1		(108)		252
Certificates of deposit	2	79		—		(5)		74

Common stock	1	27,322		5,252		(3,147)		29,427
Limited partnership fund		3,506		—		(222)		3,284
Mutual funds:
Equity	1	533		43		(11)		565
Fixed income	2	24,979		75		(1,690)		23,364
Alternative investments		13,324		—		—		13,324
Trust securities		$	106,571	$	6,221	$	(5,366)	$	107,426
Accrued investment income		$	647					$	647

Preneed cemetery trust investments								$	108,073
Market value as a percentage of cost								100.8		%

The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):


Due in one year or less	$	—
Due in one to five years	2,895
Due in five to ten years	209
Thereafter	7,989
Total fixed income securities	$	11,093

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed cemetery trust investments at December 31, 2024 are detailed below (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	23,215	$	—	$	—	$	23,215
Fixed income securities:

U.S. agency obligations	2	664		1		(46)		$	619
Foreign debt	2	8,575		1,431		(8)		9,998
Corporate debt	2	8,500		365		(256)		8,609
Preferred stock	2	2,833		479		(176)		3,136
Certificates of deposit	2	79		—		(5)		74

Common stock	1	29,325		4,322		(3,381)		30,266
Limited partnership fund		3,530		84		—		3,614

Mutual funds:
Equity	1	911		85		—		996
Fixed income	2	27,268		94		(2,376)		24,986


Trust securities		$	104,900	$	6,861	$	(6,248)	$	105,513
Accrued investment income		$	630					$	630
Preneed cemetery trust investments								$	106,143
Market value as a percentage of cost								100.6		%

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	March 31, 2025
	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. agency obligations	$	—	$	—	$	491	$	(35)	$	491	$	(35)
Foreign debt	—		—		210		(8)		210		(8)
Corporate debt	266		(10)		79		(130)		345		(140)
Preferred stock	13		—		194		(108)		207		(108)
Certificates of deposit	—		—		74		(5)		74		(5)
Total fixed income securities with an unrealized loss	$	279	$	(10)	$	1,048	$	(286)	$	1,327	$	(296)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	December 31, 2024
	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. agency obligations	$	—	$	—	$	479	$	(46)	$	479	$	(46)
Foreign debt	—		—		211		(8)		211		(8)
Corporate debt	1,274		(139)		94		(117)		1,368		(256)
Preferred stock	889		(5)		891		(171)		1,780		(176)
Certificates of deposit	—		—		74		(5)		74		(5)
Total fixed income securities with an unrealized loss	$	2,163	$	(144)	$	1,749	$	(347)	$	3,912	$	(491)

Preneed cemetery trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):


	Three months ended March 31,
		2025		2024
Investment income		$	647	$	539
Realized gains		2,003		10,576
Realized losses		(1,603)		(3,764)
Unrealized gains (losses), net		855		(6,959)
Expenses and taxes		(224)		(634)
Net change in deferred preneed cemetery receipts held in trust		(1,678)		242
		$	—	$	—

Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Purchases	$	(3,506)	$	(4,326)
Sales	18,069		16,560

Preneed Funeral Trust Investments

Preneed funeral trust investments represent trust fund assets that we are permitted to withdraw as services and merchandise are provided to customers. Preneed funeral contracts are secured by payments from customers, less retained amounts not required to be deposited into trust.

The components of Preneed funeral trust investments on our Consolidated Balance Sheets are as follows (in thousands):


	March 31, 2025		December 31, 2024
Preneed funeral trust investments, at market value	$	111,997	$	111,721
Less: allowance for contract cancellation	(3,302)		(3,305)
Preneed funeral trust investments	$	108,695	$	108,416
Less: Held for sale	(405)		(2,197)
Preneed funeral trust investments	$	108,290	$	106,219

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed funeral trust investments at March 31, 2025 are detailed below (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	35,199	$	—	$	—	$	35,199
Fixed income securities:

U.S agency obligations	2	304		—		(24)		280
Foreign debt	2	5,045		682		(7)		5,720
Corporate debt	2	3,888		134		(9)		4,013



Common stock	1	24,394		4,833		(2,630)		26,597
Limited partnership fund		3,372		—		(213)		3,159
Mutual funds:
Equity	1	400		14		(11)		403
Fixed income	2	22,794		37		(1,493)		21,338
Other investments	2	1,884		—		—		1,884
Alternative investments		12,814		—		—		12,814
Trust securities		$	110,094	$	5,700	$	(4,387)	$	111,407
Accrued investment income		$	590					$	590
Preneed cemetery trust investments								$	111,997
Market value as a percentage of cost								101.2		%

The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):


Due in one year or less	$	—
Due in one to five years	2,482
Due in five to ten years	96
Thereafter	7,435
Total fixed income securities	$	10,013

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed funeral trust investments at December 31, 2024 are detailed below (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	33,735	$	—	$	—	$	33,735
Fixed income securities:

U.S agency obligations	2	387		—		(30)		357
Foreign debt	2	8,193		1,373		(7)		9,559
Corporate debt	2	7,941		351		(134)		8,158
Preferred stock	2	2,577		460		(218)		2,819


Common stock	1	26,293		3,989		(2,876)		27,406
Limited partnership fund		3,392		80		—		3,472

Mutual funds:
Equity	1	763		41		—		804
Fixed income	2	24,952		83		(2,118)		22,917
Other investments	2	1,910		—		—		1,910

Trust securities		$	110,143	$	6,377	$	(5,383)	$	111,137
Accrued investment income		$	584					$	584
Preneed cemetery trust investments								$	111,721
Market value as a percentage of cost								100.9		%

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	March 31, 2025
	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 agency obligations	$	—	$	—	$	280	$	(24)	$	280	$	(24)
Foreign debt	—		—		202		(7)		202		(7)
Corporate debt	256		(9)		—		—		256		(9)


Total fixed income securities with an unrealized loss	$	256	$	(9)	$	482	$	(31)	$	738	$	(40)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	December 31, 2024
	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 agency obligations	$	—	$	—	$	274	$	(30)	$	274	$	(30)
Foreign debt	—		—		203		(7)		203		(7)
Corporate debt	1,225		(133)		—		(1)		1,225		(134)
Preferred stock	842		(4)		717		(214)		1,559		(218)

Total fixed income securities with an unrealized loss	$	2,067	$	(137)	$	1,194	$	(252)	$	3,261	$	(389)

Preneed funeral trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Investment income	$	473	$	436
Realized gains	1,927		9,780
Realized losses	(1,709)		(3,209)
Unrealized gains (losses), net	1,313		(5,848)
Expenses and taxes	(105)		(371)
Net change in deferred preneed funeral receipts held in trust	(1,899)		(788)
	$	—	$	—

Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Purchases	$	(3,372)	$	(4,003)
Sales	17,359		15,118

Cemetery Perpetual Care Trust Investments

Care trusts’ corpus on our Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus are as follows (in thousands):


	March 31, 2025		December 31, 2024
Cemetery perpetual care trust investments, at market value	$	88,946	$	87,337
Obligations due to (due from) trust	14		(885)
Care trusts’ corpus, including HFS	$	88,960	$	86,452
Less: Held for sale	(322)		(2,234)
Care trusts' corpus	$	88,638	$	84,218

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at March 31, 2025 (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	15,220	$	—	$	—	$	15,220
Fixed income securities:


Foreign debt	2	5,005		647		(7)		5,645
Corporate debt	2	4,334		165		(322)		4,177
Preferred stock	2	567		—		(71)		496


Common stock	1	24,278		4,772		(2,859)		26,191
Limited partnership fund		3,122		—		(198)		2,924
Mutual funds:
Equity	1	467		33		(10)		490
Fixed income	2	22,784		102		(1,564)		21,322

Alternative investments		11,862		—		—		11,862
Trust securities		$	87,639	$	5,719	$	(5,031)	$	88,327
Accrued investment income		$	619					$	619
Preneed cemetery trust investments								$	88,946
Market value as a percentage of cost								100.8		%

The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):


Due in one year or less	$	—
Due in one to five years	2,410
Due in five to ten years	289
Thereafter	7,619
Total fixed income securities	$	10,318

The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2024 (in thousands):


	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Fair Market Value
Cash and money market accounts	1	$	14,054	$	—	$	—	$	14,054
Fixed income securities:


Foreign debt	2	7,770		1,262		(7)		9,025
Corporate debt	2	7,942		357		(402)		7,897
Preferred stock	2	2,725		418		(148)		2,995


Common stock	1	25,563		3,866		(3,036)		26,393
Limited partnership fund		3,078		73		—		3,151

Mutual funds:
Equity	1	789		68		—		857
Fixed income	2	24,374		111		(2,115)		22,370


Trust securities		$	86,295	$	6,155	$	(5,708)	$	86,742
Accrued investment income		$	595					$	595
Preneed cemetery trust investments								$	87,337
Market value as a percentage of cost								100.5		%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	March 31, 2025
	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	$	—	$	—	$	187	$	(7)	$	187	$	(7)
Corporate debt	237		(8)		282		(314)		519		(322)
Preferred stock	—		—		496		(71)		496		(71)

Total fixed income securities with an unrealized loss	$	237	$	(8)	$	965	$	(392)	$	1,202	$	(400)

The following table summarizes our fixed income securities within our perpetual care trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):


	December 31, 2024
	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	$	—	$	—	$	184	$	(7)	$	184	$	(7)
Corporate debt	1,111		(121)		316		(281)		1,427		(402)
Preferred stock	764		(4)		1,086		(144)		1,850		(148)

Total fixed income securities with an unrealized loss	$	1,875	$	(125)	$	1,586	$	(432)	$	3,461	$	(557)

Perpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):


	Three months ended March 31,
	2025		2024

Realized gains	$	251	$	1,306
Realized losses	(201)		(426)
Unrealized gains (losses), net	688		(6,069)

Net change in care trusts’ corpus	(738)		5,189
	$	—	$	—

Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Investment income	$	2,487	$	3,129
Realized losses	(672)		(374)
Total	$	1,815	$	2,755

Purchases and sales of investments in the perpetual care trusts are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Purchases	$	(3,122)	$	(3,649)
Sales	15,963		14,661

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. RECEIVABLES FROM PRENEED FUNERAL TRUSTS

Our receivables from preneed funeral trusts represent assets in trusts which are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets. We account for these investments at cost. Receivables from preneed funeral trusts are as follows (in thousands):


	March 31, 2025		December 31, 2024
Preneed funeral trust funds, at cost	$	22,955	$	23,063
Less: allowance for contract cancellation	(689)		(691)
Receivables from preneed funeral trusts, net including HFS	$	22,266	$	22,372
Less: Held for sale	(27)		—
Receivables from preneed funeral trusts, net	$	22,239	$	22,372

The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations related to the underlying preneed funeral contracts at March 31, 2025 and December 31, 2024. The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes unrealized gains and losses on trust assets.

The composition of the preneed trust funds at March 31, 2025 is as follows (in thousands):


	Historical Cost Basis		Fair Value
Cash and cash equivalents	$	6,860	$	6,860
Fixed income investments	12,803		12,803
Mutual funds and common stocks	3,288		3,090
Annuities	4		4
Total	$	22,955	$	22,757

The composition of the preneed trust funds at December 31, 2024 is as follows (in thousands):


	Historical Cost Basis		Fair Value
Cash and cash equivalents	$	6,826	$	6,826
Fixed income investments	12,998		12,998
Mutual funds and common stocks	3,235		2,999
Annuities	4		4
Total	$	23,063	$	22,827

9. INTANGIBLE AND OTHER NON-CURRENT ASSETS

Intangible and other non-current assets are as follows (in thousands):


	March 31, 2025		December 31, 2024
Trade names	$	28,116	$	28,116
Internally developed software, net of accumulated amortization of $831 and $764, respectively	6,307		5,601
Capitalized commissions on preneed contracts, net of accumulated amortization of $4,616 and $4,653, respectively	4,773		4,991
Prepaid agreements not-to-compete, net of accumulated amortization of $3,654 and $3,543, respectively	814		923
Non-current prepaid and other intangibles, net of accumulated amortization of $142 and $109, respectively	908		1,011
Other	49		—
Intangible and other non-current assets, net including HFS	$	40,967	$	40,642
Less: Held for sale	(223)		(215)
Intangible and other non-current assets, net	$	40,744	$	40,427

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Trade Names

Our trade names have indefinite lives and therefore are not amortized. During the three months ended March 31, 2024, two of the funeral homes that we sold had a carrying value of tradenames of $0.2 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Internally Developed Software

Internally developed software is amortized on a straight-line basis typically over three to five years. Amortization expense was $0.1 million for both the three months ended March 31, 2025 and 2024.

Capitalized Commissions

We capitalize sales commissions and other direct selling costs related to preneed cemetery merchandise and services and preneed funeral trust contracts as these costs are incremental and recoverable costs of obtaining a contract with a customer. Our capitalized commissions on preneed contracts are amortized on a straight-line basis over the average maturity period of ten years for our preneed funeral trust contracts and eight years for our preneed cemetery merchandise and services contracts.

Amortization expense was $0.2 million for both the three months ended March 31, 2025 and 2024.

Prepaid Agreements Not-to-Compete

Prepaid agreements not-to-compete are amortized over the term of the respective agreements, generally ranging from one to ten years. Amortization expense was $0.1 million for both the three months ended March 31, 2025 and 2024.

Non-current Prepaid and Other Intangibles

Non-current prepaid agreements are related to software licenses that have been prepaid for multiple years. These agreements are amortized on a straight-line basis over the term of the respective agreements, generally ranging from two to three years. Other intangible assets relate to intellectual property and are amortized on a straight-line basis, typically over three years. Amortization expense was immaterial for both the three months ended March 31, 2025 and 2024.

The aggregate amortization expense for our capitalized commissions, prepaid not-to-compete agreements, internal-use software and non-current prepaid and other agreements as of March 31, 2025 is as follows (in thousands):


	Capitalized Commissions		Prepaid Agreements Not-to-compete		Internally Developed Software		Non-current Prepaid and Other Intangibles
Years ending December 31,
Remainder of 2025	$	834	$	281	$	1,032	$	381
2026	790		262		1,363		467
2027	739		142		1,362		60
2028	668		78		1,164		—
2029	572		38		1,109		—
Thereafter	1,170		13		277		—
Total amortization expense	$	4,773	$	814	$	6,307	$	908

10. CREDIT FACILITY AND ACQUISITION DEBT

At March 31, 2025, our senior secured revolving credit facility (as amended, the “Credit Facility”) was comprised of: (i) a $250.0 million revolving credit facility, including a $15.0 million subfacility for letters of credit and a $10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $75.0 million in the aggregate in the form of increased revolving commitments or incremental term loans.

Our obligations under the Credit Facility are unconditionally guaranteed on a joint and several basis by the same subsidiaries which guarantee the Senior Notes (as defined in Note 11) and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”).

On July 31, 2024, the Company entered into a fourth amendment, (the “Credit Facility Amendment”), to our Credit Facility, with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent. The Credit Facility Amendment provided, among other things, for (i) the extension of the maturity date of the Credit Facility to July 31, 2029, provided that, if the Senior Notes (as defined in the Credit Facility) have a stated maturity date that is prior to July 31, 2029, then the maturity date shall instead be the date that is 91 days prior to the stated maturity date of the Senior Notes; (ii) the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

establishment of Term Secured Overnight Financing Rate (“SOFR”) as a benchmark rate and the removal of BSBY from the Credit Facility, including conforming revisions to certain defined terms under the Credit Facility; (iii) the conversion of each existing BSBY Rate Loan (as defined in the Credit Facility prior to giving effect to the Credit Facility Amendment) to a Term SOFR Loan (as defined in the Credit Facility); (iv) modifications to the definitions of “Applicable Rate” and “Applicable Fee Rate” to change the applicable rates and pricing levels set forth in each pricing grid; (v) the removal of certain mandatory prepayments arising from the issuance of either Equity Interests or Debt (as both are defined by the Credit Facility); and (vi) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein.

The Credit Facility contains customary affirmative covenants, including, but not limited to, covenants with respect to the use of proceeds, payment of taxes and other obligations, continuation of the Company’s business and the maintenance of existing rights and privileges, the maintenance of property and insurance, among others.

In addition, the Credit Facility also contains customary negative covenants, including, but not limited to, covenants that restrict (subject to certain exceptions) the ability of the Company and the Subsidiary Guarantors to incur indebtedness, grant liens, make investments, engage in mergers and acquisitions, and pay dividends and other restricted payments, and certain financial maintenance covenants. At March 31, 2025, we were subject to the following financial covenants under our Credit Facility: (A) a Total Leverage Ratio not to exceed 5.00 to 1.00 and (B) a Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.20 to 1.00 as of the end of any period of four consecutive fiscal quarters. These financial maintenance covenants are calculated for the Company and its subsidiaries on a consolidated basis. We were in compliance with all of the covenants contained in our Credit Facility at March 31, 2025.

Our Credit Facility and acquisition debt consisted of the following (in thousands):


	March 31, 2025		December 31, 2024
Credit Facility	$	120,000	$	137,000
Debt issuance costs, net of accumulated amortization of $3,035 and $2,947, respectively	(1,530)		(1,618)
Total Credit Facility	$	118,470	$	135,382

Acquisition debt	$	5,437	$	5,466
Less: current portion	(581)		(571)
Total acquisition debt, net of current portion	$	4,856	$	4,895

At March 31, 2025, we had outstanding borrowings under the Credit Facility of $120.0 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, 2025 and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At March 31, 2025, we had $127.8 million of availability under the Credit Facility.

The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands):



	Three months ended March 31,
		2025		2024
Credit Facility interest expense		$	2,499	$	3,916
Credit Facility amortization of debt issuance costs		88		138

At March 31, 2025, our outstanding borrowings under our Credit Facility bore interest at a prime rate or the SOFR rate, plus an applicable margin based on our leverage ratio. At March 31, 2025, the prime rate margin was equivalent to 1.50% and the SOFR term margin was 2.50%. The weighted average interest rate on our Credit Facility was 6.9% and 8.9% for the three months ended March 31, 2025 and 2024, respectively.

Acquisition debt consists of deferred purchase price and promissory notes payable to sellers. A majority of the deferred purchase price and notes bear no interest and are discounted at imputed interest rates ranging from 6.5% to 7.3%. Original maturities typically range from nine to twenty years.

The imputed interest expense related to our acquisition debt is as follows (in thousands):



	Three months ended March 31,
	2025		2024
Acquisition debt imputed interest expense	$	94	$	104

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. SENIOR NOTES

The carrying value of our 4.25% senior notes due 2029 (the “Senior Notes”) is reflected on our Consolidated Balance Sheets as follows (in thousands):


	March 31, 2025		December 31, 2024

Principal amount	$	400,000	$	400,000

Debt discount, net of accumulated amortization of $1,986 and $1,848, respectively	(2,514)		(2,652)
Debt issuance costs, net of accumulated amortization of $565 and $526, respectively	(712)		(751)
Carrying value of the Senior Notes	$	396,774	$	396,597

At March 31, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $364.4 million.

The Senior Notes were issued under an indenture, dated as of May 13, 2021 (the “Indenture”), among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee. The Senior Notes are unsecured, senior obligations and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally by each of the Subsidiary Guarantors. The Senior Notes mature on May 15, 2029, unless earlier redeemed or purchased and bear interest at 4.25% per year, which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021.

The Indenture contains restrictive covenants limiting our ability and our Restricted Subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness or issue certain preferred shares, create liens on certain assets to secure debt, pay dividends or make other equity distributions, purchase or redeem capital stock, make certain investments, sell assets, agree to certain restrictions on the ability of Restricted Subsidiaries to make payments to us, consolidate, merge, sell or otherwise dispose of all or substantially all assets, or engage in transactions with affiliates. The Indenture also contains customary events of default.

The interest expense and amortization of debt discount and debt issuance costs related to our Senior Notes are as follows (in thousands):


	Three months ended March 31,
		2025		2024
Senior Notes interest expense		$	4,250	$	4,250
Senior Notes amortization of debt discount		138		132

Senior Notes amortization of debt issuance costs		39		38

The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 50 months of the Senior Notes. The effective interest rates on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for both the three months ended March 31, 2025 and 2024 were 4.42% and 4.30%, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. LEASES

Our lease obligations consist of operating and finance leases related to real estate, vehicles and equipment. The components of lease cost are as follows (in thousands):


		Three months ended March 31,
	Income Statement Classification	2025		2024
Operating lease cost	Facilities and grounds expense(1)	$	993	$	978
Short-term lease cost	Facilities and grounds expense(1)	56		18
Variable lease cost	Facilities and grounds expense(1)	(60)		104

Finance lease cost:
Depreciation of leased assets	Depreciation and amortization(2)	$	147	$	126
Interest on lease liabilities	Interest expense	188		125
Total finance lease cost		335		251
Total lease cost		$	1,324	$	1,351



(1)			Facilities and grounds expense is included within Cost of service and General, administrative and other on our Consolidated Statements of Operations.
(2)			Depreciation and amortization expense is included within Field depreciation expense and General, administrative and other on our Consolidated Statements of Operations.

Supplemental cash flow information related to our leases is as follows (in thousands):


	Three months ended March 31,
	2025		2024
Cash paid for operating leases included in operating activities	$	1,072	$	1,071
Cash paid for finance leases included in financing activities	308		277

Right-of-use assets obtained in exchange for new leases are as follows (in thousands):


	Three months ended March 31,
	2025		2024
Right-of-use assets obtained in exchange for new operating lease liabilities	$	159	$	852
Right-of-use assets obtained in exchange for new finance lease liabilities	3,483		—

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Supplemental balance sheet information related to leases is as follows (in thousands):


Lease Type	Balance Sheet Classification	March 31, 2025		December 31, 2024
Operating lease right-of-use assets	Operating lease right-of-use assets, including HFS	$	14,452	$	14,953
	Less: Held for sale	(74)		—
	Operating lease right-of-use assets	$	14,378	$	14,953

Finance lease right-of-use assets	Property, plant and equipment, net	$	12,047	$	8,564
Accumulated depreciation	Property, plant and equipment, net	(3,361)		(3,214)
Finance lease right-of-use assets, net		$	8,686	$	5,350

Operating lease current liabilities	Current portion of operating lease obligations	$	2,843	$	2,810
Finance lease current liabilities	Current portion of finance lease obligations	790		533
Total current lease liabilities	Total current lease liabilities, including HFS	$	3,633	$	3,343
	Less: Held for sale	(22)		—
	Total current lease liabilities	$	3,611	$	3,343

Operating lease non-current liabilities	Obligations under operating leases, net of current portion	$	13,432	$	14,035
Finance lease non-current liabilities	Obligations under finance leases, net of current portion	9,152		6,045
Total non-current lease liabilities	Total non-current lease liabilities, including HFS	$	22,584	$	20,080
	Less: Held for sale	(53)		—
	Total non-current lease liabilities	$	22,531	$	20,080

Total lease liabilities, including HFS		$	26,217	$	23,423

The average lease terms and discount rates at March 31, 2025 are as follows:


	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	6.9	8.1	%
Finance leases	18.8	8.4	%

The aggregate future lease payments for non-cancelable operating and finance leases at March 31, 2025 are as follows (in thousands):


	Operating		Finance
Lease payments due:
Remainder of 2025	$	3,055	$	989
2026	3,985		1,328
2027	3,743		1,338
2028	3,393		1,097
2029	2,970		1,031
Thereafter	3,906		16,693
Total lease payments	$	21,052	$	22,476
Less: Interest	(4,777)		(12,534)
Present value of lease liabilities, including HFS	$	16,275	$	9,942

At March 31, 2025, we had no significant operating or finance leases that had not yet commenced.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. STOCKHOLDERS’ EQUITY

Restricted Stock

Restricted stock activity is as follows (in thousands, except shares):


	Three months ended March 31,
		2025		2024
			Shares	Fair Value		Shares	Fair Value
Granted(1)			114,684	$	4,764	156,630	$	3,834
Returned for payroll taxes			28,656	$	1,168	16,315	$	418
Cancelled			—	$	—	26,240	$	841

(1)

Restricted stock granted during the three months ended March 31, 2025 and 2024 vests over a three-year period, if the employee has remained continuously employed by us during the vesting period, at a weighted average stock price of $41.54 and $24.48, respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $0.7 million and $0.5 million, for the three months ended March 31, 2025 and 2024, respectively.

Stock Options

Stock option grants and cancellations are as follows (in thousands, except shares):


	Three months ended March 31,
	2025			2024
	Shares	Fair Value		Shares	Fair Value
Granted(1)	—	$	—	370,590	$	3,830
Cancelled	1,180	$	15	294,728	$	3,757

(1)

Stock options granted during the three months ended March 31, 2024 had a weighted average price of $24.48. The fair value of these options was calculated using the Black-Scholes option pricing model. The options granted in 2024 vest over a three-year period and have a ten-year term. These options will vest if the employee has remained continuously employed by us through the vesting period.

Additional stock option activity is as follows (in thousands, except shares):


	Three months ended March 31,
		2025		2024
			Shares	Cash		Shares	Cash
Exercised(1)			190,415	$	321	—	$	—
Returned for option price(2)			112,858	$	4,493	—	$	—
Returned for payroll taxes(3)			20,016	$	799	—	$	—



(1)			Stock options exercised during the three months ended March 31, 2025 had a weighted average exercise price of $25.28 with an aggregate intrinsic value of $2.7 million.
(2)			Represents shares withheld/cash received for the payment of the option price.
(3)			Represents shares withheld/cash paid for the payment of payroll taxes.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options of $0.8 million and $0.2 million, for the three months ended March 31, 2025 and 2024, respectively.

Performance Awards

During the three months ended March 31, 2025, we granted performance awards to our executive leadership team payable in shares. These awards will vest, if at all, provided that certain predetermined performance metrics related to the Company's adjusted consolidated EBITDA (adjusted earnings before interest tax depreciation and amortization) are achieved during the period commencing on the grant date, March 7, 2025, through March 31, 2028, subject to certification by the Compensation Committee of the Board of Directors (“Board”) and the individual remaining continuously employed by us through such date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The performance award activity for the three months ended March 31, 2025 is as follows (in thousands, except shares):


	Three months ended March 31,
	2025			2024
	Shares	Fair Value		Shares	Fair Value
Granted(1)	90,894	$	3,508	—	$	—
Returned for payroll taxes	142,070	$	5,662	—	$	—
Cancelled	—	$	—	80,276	$	871

(1)

The fair value of the performance awards granted during the three months ended March 31, 2025 was calculated using the stock price on the grant date of $38.59.

For the three months ended March 31, 2025 and 2024, we recorded stock-based compensation expense of $0.1 million and stock-based compensation benefit of $0.4 million, respectively, for performance awards, which is included in General, administrative and other expenses.

Employee Stock Purchase Plan

ESPP activity is as follows:

Three months ended March 31,

2025

2024

Price

ESPP

CARRIAGE SERVICES INC 10-Q