What changed in this filing

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Item 1. Financial Statements

2021-11-03 compared with 2021-08-04 · 294 added, 242 removed, 1033 unchanged (34% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

December 31, 2020 June 30, 2021

(unaudited and in thousands, except share data)

December 31, 2020 September 30, 2021

Current assets:

42 unchanged sentences

Treasury stock, at cost;

8,025,339 and 8,350,043 at December 31, 2020 and June 30, 2021

8,025,339 and 9,553,536 at December 31, 2020 and September 30, 2021

( 102,050 ) ( 167,590 )

5 unchanged sentences

(unaudited and in thousands, except per share data)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

21 unchanged sentences

Other, net ( 28 ) ( 21 ) ( 34 ) ( 87 )

Income (loss) before income taxes 9,846 ( 10,359 ) 3,499 8,215

Benefit (expense) for income taxes ( 3,299 ) 3,417 ( 1,163 ) ( 2,341 )

Income before income taxes 8,384 18,168 11,883 26,383

Expense for income taxes ( 2,851 ) ( 5,125 ) ( 4,014 ) ( 7,466 )

Tax adjustment related to discrete items ( 8 ) 3 ( 144 ) 895

Total benefit (expense) for income taxes ( 3,449 ) 4,192 ( 1,299 ) ( 1,449 )

Net income (loss) $ 6,397 $ ( 6,167 ) $ 2,200 $ 6,766

Basic earnings (loss) per common share:

Total expense for income taxes ( 2,859 ) ( 5,122 ) ( 4,158 ) ( 6,571 )

Net income $ 5,525 $ 13,046 $ 7,725 $ 19,812

Basic earnings per common share:

$ 0.31 $ 0.74 $ 0.43 $ 1.11

Diluted earnings (loss) per common share:

Diluted earnings per common share:

$ 0.31 $ 0.71 $ 0.43 $ 1.08

8 unchanged sentences

(unaudited and in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

10 unchanged sentences

Net loss on divestitures, disposals and impairment charges 19,855 1,558

Changes in operating assets and liabilities that provided (required) cash:

Gain on insurance reimbursements ( 54 ) —

Changes in operating assets and liabilities that provided (used) cash:

Accounts and preneed receivables ( 436 ) ( 4,387 )

25 unchanged sentences

Purchase of treasury stock — ( 61,739 )

Net cash provided by (used in) financing activities 2,694 ( 32,893 )

Net increase (decrease) in cash and cash equivalents ( 24 ) 604

Net cash used in financing activities ( 37,281 ) ( 58,284 )

Net increase in cash and cash equivalents 9 199

Cash and cash equivalents at beginning of period 716 889

4 unchanged sentences

(unaudited and in thousands)

Three months ended June 30, 2020

Three months ended September 30, 2020

Outstanding Common

2 unchanged sentences

Earnings Treasury

Balance – March 31, 2020 17,909 $ 259 $ 242,234 $ 82,016 $ ( 102,050 ) $ 222,459

Balance – June 30, 2020 17,934 $ 260 $ 241,868 $ 88,413 $ ( 102,050 ) $ 228,491

Net income — — — 5,525 — 5,525

Issuance of common stock from employee stock purchase plan 16 — 297 — — 297

Issuance of common stock to directors 8 — 147 — — 147

Issuance of common stock to directors and board advisor 9 — 198 — — 198

Exercise of stock options 12 — ( 31 ) — — ( 31 )

Cancellation and surrender of restricted common stock ( 1 ) — ( 16 ) — — ( 16 )

Stock-based compensation expense — — 729 — — 729

Dividends on common stock — — ( 1,569 ) — — ( 1,569 )

Balance – June 30, 2020 17,934 $ 260 $ 241,868 $ 88,413 $ ( 102,050 ) $ 228,491

Three months ended June 30, 2021

Convertible notes exchange — — ( 828 ) — — ( 828 )

Balance – September 30, 2020 17,970 $ 260 $ 240,648 $ 93,938 $ ( 102,050 ) $ 232,796

Three months ended September 30, 2021

Outstanding Common

2 unchanged sentences

Earnings Treasury

Balance – March 31, 2021 18,048 $ 261 $ 238,056 $ 115,236 $ ( 102,050 ) $ 251,503

Net loss — — — ( 6,167 ) — ( 6,167 )

Balance – June 30, 2021 17,826 $ 262 $ 237,891 $ 109,069 $ ( 114,351 ) $ 232,871

Net income — — — 13,046 — 13,046

Issuance of common stock from employee stock purchase plan 15 — 388 — — 388

Issuance of common stock to directors 5 — 160 — — 160

Issuance of common stock to directors and board advisor 3 — 147 — — 147

Exercise of stock options 12 — ( 82 ) — — ( 82 )

3 unchanged sentences

Treasury stock acquired ( 1,203 ) — — — ( 53,239 ) ( 53,239 )

Balance – June 30, 2021 17,826 $ 262 $ 237,891 $ 109,069 $ ( 114,351 ) $ 232,871

Balance – September 30, 2021 16,652 $ 262 $ 237,681 $ 122,115 $ ( 167,590 ) $ 192,468

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

2 unchanged sentences

(unaudited and in thousands)

Six months ended June 30, 2020

Nine months ended September 30, 2020

Outstanding Common

5 unchanged sentences

Issuance of common stock from employee stock purchase plan 60 1 920 — — 921

Issuance of common stock to directors 17 — 294 — — 294

Issuance of common stock to directors and board advisor 26 — 492 — — 492

Issuance of restricted common stock 10 — — — — —

Exercise of stock options 12 — ( 31 ) — — ( 31 )

Cancellation and surrender of restricted common stock ( 11 ) — ( 250 ) — — ( 250 )

1 unchanged sentence

Dividends on common stock — — ( 4,251 ) — — ( 4,251 )

Convertible notes exchange — — ( 828 ) — — ( 828 )

Other 18 — 468 — — 468

Balance – June 30, 2020 17,934 $ 260 $ 241,868 $ 88,413 $ ( 102,050 ) $ 228,491

Six months ended June 30, 2021

Balance – September 30, 2020 17,970 $ 260 $ 240,648 $ 93,938 $ ( 102,050 ) $ 232,796

Nine months ended September 30, 2021

Outstanding Common

5 unchanged sentences

Issuance of common stock from employee stock purchase plan 47 1 1,227 — — 1,228

Issuance of common stock to directors 10 — 337 — — 337

Issuance of common stock to directors and board advisor 13 — 495 — — 495

Issuance of restricted common stock 9 — — — — —

5 unchanged sentences

Treasury stock acquired ( 1,528 ) — — — ( 65,540 ) ( 65,540 )

Balance – June 30, 2021 17,826 $ 262 $ 237,891 $ 109,069 $ ( 114,351 ) $ 232,871

Balance – September 30, 2021 16,652 $ 262 $ 237,681 $ 122,115 $ ( 167,590 ) $ 192,468

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

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(“Carriage,” the “Company,” “we,” “us,” or “our”) is a leading provider of funeral and cemetery services and merchandise in the United States.

As of June 30, 2021, we operated 171 funeral homes in 26 states and 32 cemeteries in 12 states.

Our operations are reported in two business segments:

Funeral Home Operations, which currently account for approximately 70 % of our revenue and Cemetery Operations, which currently account for approximately 30 % of our revenue.

At September 30, 2021, we operated 171 funeral homes in 26 states and 32 cemeteries in 12 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.

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Reclassifications

Certain reclassifications have been made to prior period amounts on our Consolidated Statements of Cash Flows related to the amortization of non-compete agreements and on our Statement of Changes in Stockholders Equity related to the issuance of common stock to conform to the current period financial statement presentation with no effect on our previously reported Consolidated Statements of Operations and Consolidated Balance Sheet.

Certain reclassifications have been made to prior period amounts on our Consolidated Statements of Cash Flows related to the amortization of our intangible assets, debt and debt issuance costs to conform to the current period financial statement presentation with no effect on our previously reported Consolidated Statements of Operations and Consolidated Balance Sheet.

Use of Estimates

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Atneed cemetery receivables and preneed cemetery receivables with payments expected to be received within one year from the balance sheet date are 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.

Our cemetery receivables generally consist of preneed sales of cemetery interment rights and related products and services, which are typically financed through interest-bearing installment sales contracts, generally with terms of up to five years , with such interest income reflected as Other revenue .

Preneed cemetery receivables with payments expected to be received beyond one year from the balance sheet date are recorded in Preneed cemetery receivables, net.

receivables generally consist of preneed sales of cemetery interment rights and related products and services, which are typically financed through interest-bearing installment sales contracts, generally with terms of up to five years , with such interest income reflected as Other revenue .

In substantially all cases, we receive an initial down payment at the time the contract is signed.

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As such, we test goodwill for impairment on an annual basis as of August 31st each year.

Under current guidance, we are permitted to first assess

qualitative factors to determine whether it is more-likely-than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

Our intent is to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years.

In addition to our annual test, we assess the impairment of goodwill whenever events or changes in circumstances indicate that the carrying value of a reporting unit may be greater than fair value.

Factors that could trigger an interim impairment review include, but are not limited to, significant negative industry or economic trends and significant adverse changes in the business climate, which may be indicated by a decline in our market capitalization or decline in operating results.

Factors that could trigger an interim impairment review include, but are not limited to, significant negative industry

or economic trends and significant adverse changes in the business climate, which may be indicated by a decline in our market capitalization or decline in operating results.

We performed our annual goodwill impairment test as of August 31, 2021.

Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

For our 2021 annual goodwill impairment test, we performed a qualitative assessment and determined that there were no factors that would indicate the need to perform an additional quantitative goodwill impairment test.

We concluded that it is more-likely-than not that the fair value of our reporting units is greater than their carrying value and thus there was no impairment to goodwill.

For our 2020 annual qualitative assessment, there was no impairment to goodwill as the fair value of our reporting units was greater than the carrying value.

When we divest a portion of a reporting unit that constitutes a business in accordance with U.S.

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As such, we test our intangible assets for impairment on an annual basis as of August 31 st each year.

Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than not that the fair value of the tradename is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test.

Our intent is to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years.

In addition to our annual test, we assess the impairment of intangible assets whenever certain events or changes in circumstances indicate that the carrying value of the intangible asset may be greater than the fair value.

Factors that could trigger an interim impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results and significant negative industry or economic trends.

We performed our annual intangible assets impairment test as of August 31, 2021.

For our 2021 annual intangible assets impairment test, we performed a qualitative assessment and determined that there were no factors that would indicate the need to perform an additional quantitative impairment test.

We concluded that it is more-likely-than not that the fair value of our intangible assets is greater than its carrying value and thus there was no impairment to our intangible assets.

For our 2020 annual qualitative assessment, there was no impairment to intangible assets as the fair value of our intangible assets was greater than the carrying value.

See Note 9 to the Consolidated Financial Statements included herein for additional information related to our intangible assets.

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In accordance with respective state laws, we are required to deposit a specified amount into perpetual and memorial care trust funds for each interment right and certain memorials sold.

Income from the trust funds is distributed to us and used to

provide for the care and maintenance of the cemeteries and mausoleums.

Income from the trust funds is distributed to us and used to provide for the care and maintenance of the cemeteries and mausoleums.

Trust fund income is recognized as revenue when realized by the trust and distributable to us.

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Land $ 82,615 $ 82,736

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Property, plant and equipment, net $ 269,051 $ 267,756

During the six months ended June 30, 2021, we acquired real estate for $ 2.9 million.

During the nine months ended September 30, 2021, we acquired real property for $ 3.3 million.

We also divested three funeral homes that had a carrying value of property, plant and equipment of $ 2.4 million, which was included in the Gain (loss) on divestitures and recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, described in Note 4 to the Consolidated Financial Statements included herein.

Our growth and maintenance capital expenditures totaled $ 3.0 million and $ 4.4 million for the three months ended June 30, 2020 and 2021, respectively and $ 5.8 million and $ 8.8 million for the six months ended June 30, 2020 and 2021, respectively, for property, plant, equipment and cemetery development.

In addition, we recorded depreciation expense of $ 3.6 million and $ 3.4 million for the three months ended June 30, 2020 and 2021, respectively and $ 7.2 million and $ 6.8 million for the six months ended June 30, 2020 and 2021, respectively.

Additionally, during the nine months ended September 30, 2021, we sold real property for $ 0.7 million and recognized a loss on sale of $ 0.3 million, which was recorded in Net loss on divestitures, disposals and impairment charges.

At September 30, 2021, we had $ 2.3 million carrying value of property, plant and equipment assets held for sale and we recognized a $ 0.5 million impairment loss related to these assets recorded in Net loss on divestitures, disposals and impairment charges.

Our growth and maintenance capital expenditures totaled $ 4.2 million and $ 6.5 million for the three months ended September 30, 2020 and 2021, respectively and $ 10.0 million and $ 15.3 million for the nine months ended September 30, 2020 and 2021, respectively, for property, plant, equipment and cemetery development.

In addition, we recorded depreciation expense of $ 3.5 million and $ 3.4 million for the three months ended September 30, 2020 and 2021, respectively and $ 10.8 million and $ 10.2 million for the nine months ended September 30, 2020 and 2021, respectively.

Cemetery Property

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Through this thorough internal process, we are 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.

Cemetery property was $ 101.1 million and $ 100.6 million at December 31, 2020 and June 30, 2021, respectively, net of accumulated amortization of $ 46.6 million and $ 50.3 million, respectively.

Cemetery property was $ 101.1 million and $ 100.5 million at December 31, 2020 and September 30, 2021, respectively, net of accumulated amortization of $ 46.6 million and $ 51.8 million, 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.

We recorded amortization expense for cemetery interment rights of $ 1.1 million and $ 2.2 million for the three months ended June 30, 2020 and 2021, respectively and $ 2.0 million and $ 3.7 million for the six months ended June 30, 2020 and 2021, respectively.

We recorded amortization expense for cemetery interment rights of $ 1.5 million for both the three months ended September 30, 2020 and 2021 and $ 3.4 million and $ 5.2 million for the nine months ended September 30, 2020 and 2021, respectively.

We have operating and finance leases.

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The lease terms used to calculate the ROU asset and related lease liability include options to extend the lease when it is reasonably certain that we will exercise that option.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense, while the expense for finance leases is recognized as depreciation expense and interest expense using the effective interest method of recognition.

Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities.

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We have real estate lease agreements which require payments for lease and non-lease components and we account for these as a single lease component.

Leases with an initial term of 12 months or less,

that do not include an option to renew the underlying asset, are not recorded on our Consolidated Balance Sheet and expense is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less, that do not include an option to renew the underlying asset, are not recorded on our Consolidated Balance Sheet and expense is recognized on a straight-line basis over the lease term.

Operating lease ROU assets are included in Operating lease right-of-use assets and operating lease liabilities are included in Current portion of operating lease obligation s and Obligations under operating leases, net of current portion on our Consolidated Balance Sheet.

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The earnings from our preneed trust investments, as well as trust management fees charged by our wholly-owned registered investment advisory firm (“CSV RIA”) are recorded in Other revenue .

As of June 30, 2021, CSV RIA provided investment management and advisory services to approximately 80 % of our trust assets, for a fee based on the market value of trust assets.

As of September 30, 2021, CSV RIA

provided investment management and advisory services to approximately 80 % of our trust assets, for a fee based on the market value of trust assets.

Under state trust laws, we are allowed to charge the trust a fee for advising on the investment of the trust assets and these fees are recognized as income in the period in which services are provided.

Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheet of $ 8.2 million and $ 8.4 million at December 31, 2020 and June 30, 2021, respectively.

As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods.

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Balances due on undelivered preneed cemetery contracts have been reclassified to reduce Deferred preneed cemetery revenue on our Consolidated Balance Sheet.

The transaction price allocated to preneed merchandise and service performance obligations that were unfulfilled were $ 7.9 million and $ 9.8 million at December 31, 2020 and June 30, 2021, respectively.

The transaction price allocated to preneed merchandise and service performance obligations that were unfulfilled were $ 7.9 million and $ 10.6 million at December 31, 2020 and September 30, 2021, respectively.

As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods.

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The majority of the net operating losses generated in 2018 are the result of filing non-automatic accounting method changes relating to the recognition of revenue from our cemetery property and merchandise and services sales.

Due to the uncertainty of receiving Internal Revenue Service (“IRS”) approval regarding our non-automatic accounting method changes, a reserve has been recorded against the benefit derived from this carrying back that the net operating losses generated.

At both December 31, 2020 and June 30, 2021, the reserve for uncertain tax positions was $ 3.7 million.

As of September 30, 2021, we received an adverse ruling related to the change to our method of recognition of revenue from our constructed cemetery property, however, we are currently in further discussions with the Internal Revenue Service (“IRS”) regarding this ruling.

Due to the uncertainty that exists, a reserve has been recorded against the benefit derived from this carrying back that the net operating losses generated.

At both December 31, 2020 and September 30, 2021, the reserve for uncertain tax positions was $ 3.7 million.

Income tax expense during interim periods is based on our forecasted annual effective tax rate plus any discrete items, which are recorded in the period in which they occur.

Discrete items include, but are not limited to, such events as changes in estimates due to finalization of income tax returns, tax audit settlements, tax effects of exercised or vested stock-based awards and increases or decreases in valuation allowances on deferred tax assets.

For the three months ended June 30, 2020 and 2021, we had an income tax expense of $ 3.4 million and an income tax benefit of $ 4.2 million, respectively and for the six months ended June 30, 2020 and 2021, we had an income tax expense of $ 1.3 million and $ 1.4 million, respectively.

Our operating tax rate before discrete items was 33.5 % and 33.0 % for the three months ended June 30, 2020 and 2021, respectively and 33.3 % and 28.5 % for the six months ended June 30, 2020 and 2021, respectively.

For the three months ended September 30, 2020 and 2021, we had an income tax expense of $ 2.9 million and $ 5.1 million, respectively and for the nine months ended September 30, 2020 and 2021, we had an income tax expense of $ 4.2 million and $ 6.6 million, respectively.

Our operating tax rate before discrete items was 34.0 % and 28.2 % for the three months ended September 30, 2020 and 2021, respectively and 33.8 % and 28.3 % for the nine months ended September 30, 2020 and 2021, respectively.

Computation of Earnings Per Common Share

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Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are recognized as participating securities and included in the computation of both basic and diluted earnings per share.

Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our

earnings per share calculations attributable to common stockholders to exclude outstanding unvested restricted stock awards, using the two-class method, in both the basic and diluted weighted average shares outstanding calculation.

Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our earnings per share calculations attributable to common stockholders to exclude outstanding unvested restricted stock awards, using the two-class method, in both the basic and diluted weighted average shares outstanding calculation.

Our performance awards are considered to be contingently issuable shares because their issuance is contingent upon the satisfaction of certain performance and service conditions.

3 unchanged sentences

Subsequent Events

We have evaluated events and transactions during the period subsequent to June 30, 2021 through the date the financial statements were issued for potential recognition or disclosure in the accompanying financial statements covered by this report.

We have evaluated events and transactions during the period subsequent to September 30, 2021 through the date the financial statements were issued for potential recognition or disclosure in the accompanying financial statements covered by this report.

See Note 18 to the Consolidated Financial Statements included herein for additional information related to our subsequent events.

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These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

The Company did not utilize the optional expedients and exceptions provided by this ASU during the six months ended June 30, 2021.

The Company did not utilize the optional expedients and exceptions provided by this ASU during the nine months ended September 30, 2021.

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Goodwill at the beginning of the period $ 398,292 $ 392,978

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Goodwill at the end of the period $ 392,978 $ 391,972

During the six months ended June 30, 2021, we allocated $ 1.0 million of goodwill to the sale of one funeral home for a loss recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the nine months ended September 30, 2021, we allocated $ 1.0 million of goodwill to the sale of one funeral home for a loss recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

See Note 1 to the Consolidated Financial Statements included herein, for a discussion of the methodology used for our goodwill impairment test.

DIVESTED OPERATIONS

During the three and six months ended June 30, 2021, we sold one funeral home for $ 0.7 million and three funeral homes for $ 3.5 million, respectively.

During the three and six months ended June 30, 2020, we did not sell any funeral homes or cemeteries.

During the three months ended September 30, 2021, we did not sell any funeral homes or cemeteries.

During the nine months ended September 30, 2021, we sold three funeral homes for $ 3.5 million.

During the three and nine months ended September 30, 2020, we sold six funeral homes for $ 7.3 million.

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Revenue $ 144 $ ( 10 ) $ 1,829 $ 338

Operating loss — ( 37 ) — ( 12 )

Operating income (loss) ( 112 ) ( 41 ) 70 ( 54 )

Gain (loss) on divestitures (1)

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

June 30, 2021

September 30, 2021

Funeral Cemetery Corporate Total

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Accounts receivable, net $ 11,488 $ 13,414 $ 201 $ 25,103

Other receivables include supplier rebates, commissions due from third party insurance companies, perpetual care income receivables and proceeds due from an insurance claim.

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 (in thousands):

January 1, 2021 Provision for Credit Losses Write Offs Recoveries June 30, 2021

January 1, 2021 Provision for Credit Losses Write Offs Recoveries September 30, 2021

Trade and financed receivables:

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Cemetery interment rights $ 36,696 $ 41,179

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Preneed cemetery receivables $ 47,222 $ 52,840

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The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net (in thousands):

January 1, 2021 Provision for Credit Losses Write Offs June 30, 2021

January 1, 2021 Provision for Credit Losses Write Offs September 30, 2021

Total allowance for credit losses on Preneed cemetery receivables, net

$ ( 1,644 ) $ ( 497 ) $ 826 $ ( 1,315 )

The amortized cost basis of our preneed cemetery receivables by year of origination at June 30, 2021 is as follows (in thousands):

The amortized cost basis of our preneed cemetery receivables by year of origination at September 30, 2021 is as follows (in thousands):

2021 2020 2019 2018 2017 Prior Total

Total preneed cemetery receivables, at amortized cost $ 21,057 $ 12,168 $ 7,646 $ 3,776 $ 1,699 $ 1,749 $ 48,095

The aging of past due preneed cemetery receivables at June 30, 2021 is as follows (in thousands):

The aging of past due preneed cemetery receivables at September 30, 2021 is as follows (in thousands):

Past Due 61-90

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Preneed cemetery trust investments, at market value $ 89,081 $ 100,318

1 unchanged sentence

Preneed cemetery trust investments $ 86,604 $ 97,489

The cost and market values associated with preneed cemetery trust investments at June 30, 2021 are detailed below (in thousands):

The cost and market values associated with preneed cemetery trust investments at September 30, 2021 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

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Mutual funds:

Equity 1 28 5 — 33

Fixed Income 2 11,358 706 ( 344 ) 11,720

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Market value as a percentage of cost 106.7 %

The following table summarized our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at June 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2021

The following table summarized our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at September 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

September 30, 2021

In Loss Position Less than 12 months In Loss Position Greater than 12 months Total

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Preneed funeral trust investments, at market value $ 104,166 $ 111,587

1 unchanged sentence

Preneed funeral trust investments $ 101,235 $ 108,404

The cost and market values associated with preneed funeral trust investments at June 30, 2021 are detailed below (in thousands):

The cost and market values associated with preneed funeral trust investments at September 30, 2021 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

9 unchanged sentences

Mutual funds:

Equity 1 26 4 — 30

Fixed income 2 9,398 539 ( 269 ) 9,668

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Market value as a percentage of cost 105.7 %

The following table summarized our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at June 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2021

The following table summarized our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at September 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

September 30, 2021

In Loss Position Less than 12 months In Loss Position Greater than 12 months Total

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

4 unchanged sentences

The components of Care trusts’ corpus are as follows (in thousands):

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Cemetery perpetual care trust investments, at market value $ 70,828 $ 71,640

1 unchanged sentence

Care trusts’ corpus $ 69,707 $ 70,960

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at June 30, 2021 (in thousands):

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at September 30, 2021 (in thousands):

Fair Value Hierarchy Level Cost Unrealized

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Mutual funds:

Equity 1 19 3 — 22

Fixed Income 2 8,223 596 ( 307 ) 8,512

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Market value as a percentage of cost 106.6 %

The following table summarized our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at June 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2021

The following table summarized our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at September 30, 2021, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

September 30, 2021

In Loss Position Less than 12 months In Loss Position Greater than 12 months Total

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Investment income $ 2,531 $ 2,881 $ 5,879 $ 8,104

Realized losses, net 27 ( 141 ) ( 9 ) ( 279 )

Realized gains (losses), net 63 ( 278 ) 53 ( 557 )

Total $ 2,594 $ 2,603 $ 5,932 $ 7,547

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

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Receivables from preneed funeral trusts are as follows (in thousands):

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Preneed trust funeral funds, at cost $ 17,365 $ 19,243

1 unchanged sentence

Receivables from preneed funeral trusts, net $ 16,844 $ 18,665

The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations under preneed arrangements related to the preceding contracts at December 31, 2020 and June 30, 2021.

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 funeral trust funds at June 30, 2021 is as follows (in thousands):

The composition of the preneed funeral trust funds at September 30, 2021 is as follows (in thousands):

Cost Basis Fair Value

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Our acquisition debt and New Credit Facility (as defined in Note 10) and New Senior Notes (as defined in Note 11) are classified within Level 2 of the Fair Value Measurements hierarchy.

At June 30, 2021, the carrying value and fair value of our New Credit Facility was $ 60.5 million.

At September 30, 2021, the carrying value and fair value of our New Credit Facility was $ 86.9 million.

We believe that our New Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and therefore, the carrying value of our New 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 June 30, 2021, the carrying value of our acquisition debt was $ 5.2 million, which approximated its fair value.

The fair value of our New Senior Notes was approximately $ 399.5 million at June 30, 2021 based on the last traded or broker quoted price.

At December 31, 2020 and June 30, 2021, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.

At September 30, 2021, the carrying value of our acquisition debt was $ 5.1 million, which approximated its fair value.

The fair value of our New Senior Notes was approximately $ 403.2 million at September 30, 2021 based on the last traded or broker quoted price.

At December 31, 2020 and September 30, 2021, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.

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 Sheet as having met the criteria for fair value measurement.

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Tradenames $ 23,565 $ 23,565

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Our tradenames have indefinite lives and therefore are not amortized.

See Note 1 to the Consolidated Financial Statements included herein for a discussion of the methodology used for our indefinite-lived intangible asset impairment test.

Prepaid Agreements

Prepaid agreements not-to-compete are amortized over the term of the respective agreements, ranging generally from one to ten years .

Amortization expense was $ 166,000 and $ 169,000 for the three months ended June 30, 2020 and 2021, respectively and $ 353,000 and $ 337,000 for the six months ended June 30, 2020 and 2021, respectively.

Amortization expense was $ 175,000 and $ 158,000 for the three months ended September 30, 2020 and 2021, respectively and $ 551,000 and $ 495,000 for the nine months ended September 30, 2020 and 2021, respectively.

Capitalized Commissions

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These costs are amortized on a straight-line basis over the average maturity period for our preneed cemetery merchandise and services contracts and preneed funeral trust contracts, of eight and ten years , respectively.

Amortization expense was $ 144,000 and $ 156,000 for the three months ended June 30, 2020 and 2021, respectively and $ 285,000 and $ 308,000 for the six months ended June 30, 2020 and 2021, respectively.

The aggregate amortization expense for our non-compete agreements and capitalized commissions as of June 30, 2021 is as follows (in thousands):

Amortization expense was $ 145,000 and $ 165,000 for the three months ended September 30, 2020 and 2021, respectively and $ 430,000 and $ 473,000 for the nine months ended September 30, 2020 and 2021, respectively.

The aggregate amortization expense for our non-compete agreements and capitalized commissions as of September 30, 2021 is as follows (in thousands):

Prepaid Agreements Capitalized Commissions

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(i) a $ 190.0 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 form of increased revolving commitments or incremental term loans.

The final maturity of the Former Credit Facility will occur on May 31, 2023.

The final maturity of the Former Credit Facility was to occur on May 31, 2023.

On May 13, 2021, in connection with the issuance of the New Senior Notes (defined in Note 11), we entered into an amended and restated $ 150.0 million senior secured revolving credit facility (the “New Credit Facility”) with the New Credit Facility Subsidiary Guarantors (as defined below), the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent.

We incurred $ 0.8 million in transactions costs related to the New Credit Facility, which were capitalized and will be amortized over the remaining term of the related debt using the straight-line method.

On May 13, 2021, we used approximately $ 21.4 million of the availability under the New Credit Facility to repay the outstanding balances under our Former Credit Facility and all commitments thereunder were terminated.

In connection with the repayment in full of all amounts due thereunder, the Former Credit Facility was retired and $ 2.1 million of letters of credit

previously issued under the Former Credit Facility were deemed issued under (and remain outstanding under) the New Credit Facility.

In connection with the termination of the Former Credit Facility, for the three and six months ended June 30, 2021, we recognized a loss on the write-off of $ 0.1 million in unamortized debt issuance costs, which was recorded in Net loss on extinguishment of debt .

Immediately following the issuance of the New Senior Notes, we had outstanding borrowings under the New Credit Facility of $ 58.8 million and $ 89.1 million available for additional borrowings after giving effect to the $ 2.1 million of outstanding letters of credit.

On May 13, 2021, we used approximately $ 21.4 million of the availability under the New Credit Facility to repay the then outstanding balances under our Former Credit Facility and all commitments thereunder were terminated.

In connection with the repayment in full of all amounts due thereunder, the Former Credit Facility was retired and $ 2.1 million of letters of credit previously issued under the Former Credit Facility were deemed issued under (and remain outstanding under) the New Credit Facility.

In connection with the termination of the Former Credit Facility, for the nine months ended September 30, 2021, we recognized a loss on the write-off of $ 0.1 million in unamortized debt issuance costs, which was recorded in Loss on extinguishment of debt .

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

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In addition, the New 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 June 30, 2021, we were subject to the following financial covenants under our New Credit Facility:

At September 30, 2021, we were subject to the following financial covenants under our New 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 New 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 New Credit Facility as of June 30, 2021.

We were in compliance with all of the covenants contained in our New Credit Facility as of September 30, 2021.

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Credit Facility $ 47,200 $ 86,900

5 unchanged sentences

Total acquisition debt, net of current portion $ 4,482 $ 4,359

At June 30, 2021, we had outstanding borrowings under the New Credit Facility of $ 60.5 million.

We also had one letter of credit for $ 2.1 million outstanding under the New Credit Facility, which will expire on November 25, 2021.

This letter of credit is expected to automatically renew annually and secures our obligations under our various self-insured policies.

At June 30, 2021, we had $ 87.4 million of availability under the New Credit Facility.

At September 30, 2021, we had outstanding borrowings under the New Credit Facility of $ 86.9 million.

We also had one letter of credit for $ 2.1 million under the New Credit Facility, which was increased to $ 2.3 million on September 1, 2021.

The letter of credit will expire on November 26, 2021 and is expected to automatically renew annually and secures our obligations under our various self-insured policies.

At September 30, 2021, we had $ 60.8 million of availability under the New Credit Facility.

Outstanding borrowings under our New Credit Facility bear interest at either a prime rate or a LIBOR rate, plus an applicable margin based upon our leverage ratio.

At June 30, 2021, the prime rate margin was equivalent to 0.75 % and the LIBOR rate margin was 1.75 %.

The weighted average interest rate on our New Credit Facility was 2.5 % and 2.8 % and for the three and six months ended June 30, 2021, respectively.

The weighted average interest rate on our Former Credit Facility was 3.6 % and 3.9 % for the three and six months ended June 30, 2020, respectively.

At September 30, 2021, the prime rate margin was equivalent to 0.75 % and the LIBOR rate margin was 1.75 %.

The weighted average interest rate on our New Credit Facility was 2.0 % and 2.5 % for the three and nine months ended September 30, 2021, respectively.

The weighted average interest rate on our Former Credit Facility was 3.9 % and 4.0 % for the three and nine months ended September 30, 2020, respectively.

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

5 unchanged sentences

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

1 unchanged sentence

On May 13, 2021, we completed the issuance of $ 400.0 million in aggregate principal amount 4.25 % Senior Notes due 2029 (the “New Senior Notes”) and related guarantees by the Subsidiary Guarantors in a private offering under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).

We used the proceeds of $ 395.5 million from the offering of the New Senior Notes, which are net of a 1.125 % debt discount of $ 4.5 million, together with cash on hand and borrowings under the New Credit Facility, to redeem all of our existing $ 400.0 million in aggregate principal amount 6.625 % senior notes due 2026 (the “Original Senior Notes”).

We used the proceeds of $ 395.5 million from the offering of the New Senior Notes, which are net of a 1.125 % debt discount of $ 4.5 million, together with cash on hand and borrowings under the New Credit Facility, to redeem all of our then outstanding $ 400.0 million in aggregate principal amount 6.625 % senior notes due 2026 (the “Original Senior Notes”).

We paid a premium of $ 19.9 million to redeem the Original Senior Notes on June 1, 2021 at a redemption price of 104.97 % of the principal amount thereof, plus accrued and unpaid interest of $ 13.25 million.

We incurred $ 1.3 million in transaction costs related to the New Senior Notes.

For the three and six months ended June 30, 2021, we recognized a net loss of $ 23.7 million related to the redemption of the Original Senior Notes, which was recorded in Net loss on extinguishment of debt .

During the nine months ended September 30, 2021, we incurred $ 1.3 million in transaction costs related to the New Senior Notes.

For the nine months ended September 30, 2021, we recognized a net loss of $ 23.7 million related to the redemption of the Original Senior Notes, which was recorded in Loss on extinguishment of debt .

The loss is composed of the $ 19.9 million call premium, the write-off of $ 3.4 million in unamortized debt discount, the write-off of $ 1.8 million in unamortized debt issuance costs, offset by the write-off of $ 1.4 million in unamortized debt premium.

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In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the New Senior Notes at a price equal to 100 % of the principal amount of the New Senior Notes, plus accrued and unpaid interest.

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 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 debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 92 months of the New Senior Notes.

The effective interest rate on the unamortized debt discount and the unamortized debt issuance costs for the New Senior Notes for both three and six months ended June 30, 2021 was 4.42 % and 4.30 %, respectively.

The effective interest rate on the unamortized debt discount and the unamortized debt issuance costs for the New Senior Notes for both three and nine months ended September 30, 2021 was 4.42 % and 4.30 %, respectively.

The carrying value of our Senior Notes is reflected on our Consolidated Balance Sheet as follows (in thousands):

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Long-term liabilities:

6 unchanged sentences

Carrying value of the Senior Notes $ 395,968 $ 394,456

At June 30, 2021, the fair value of the New Senior Notes, which are Level 2 measurements, was $ 399.5 million.

At September 30, 2021, the fair value of the New Senior Notes, which are Level 2 measurements, was $ 403.2 million.

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

3 unchanged sentences

Senior Notes amortization of debt issuance costs 72 34 208 161

The effective interest rate on the unamortized debt issuance costs for the Original Senior Notes, issued in May 2018, for both three and six months ended June 30, 2021 was 6.87 % and 6.69 %, respectively.

The effective interest rate on the unamortized debt premium and the unamortized debt issuance costs for the additional Original Senior Notes, issued in December 2019, for both three and six months ended June 30, 2021 was 6.20 % and 6.88 %, respectively.

The effective interest rate on the unamortized debt discount and unamortized debt issuance costs for the Original Senior Notes, issued in May 2018, for both the three and nine months ended September 30, 2020 was 6.87 % and 6.69 %, respectively.

The effective interest rate on the unamortized debt premium and the unamortized debt issuance costs for the additional Original Senior Notes, issued in December 2019, for both the three and nine months ended September 30, 2020 was 6.20 % and 6.90 %, respectively.

Our lease obligations consist of operating and finance leases related to real estate and equipment.

The components of lease cost are as follows (in thousands):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

Income Statement Classification 2020 2021 2020 2021

2 unchanged sentences

Short-term lease cost Facilities and grounds expense (1)

35 39 107 145

Variable lease cost Facilities and grounds expense (1)

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

Six months ended June 30,

Nine months ended September 30,

Cash paid for operating leases included in operating activities $ 2,470 $ 2,891

1 unchanged sentence

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

Six months ended June 30,

Nine months ended September 30,

Right-of-use assets obtained in exchange for new operating lease liabilities $ 75 $ ( 1,358 )

Right-of-use assets obtained in exchange for new finance lease liabilities — —

During the three and nine months ended September 30, 2021, we received a leasehold improvement allowance of $ 1.4 million for the renovation of our home office space in Houston, Texas from our lessor.

We recorded a leasehold improvement asset as property plant and equipment and reduced our right-of-use asset by $ 1.4 million.

The leasehold improvement allowance will be recognized prospectively by ratably reducing the lease expense over the remaining lease term.

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

Lease Type Balance Sheet Classification December 31, 2020 June 30, 2021

Lease Type Balance Sheet Classification December 31, 2020 September 30, 2021

Operating lease right-of-use assets Operating lease right-of-use assets $ 21,201 $ 18,307

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Total lease liabilities $ 28,238 $ 26,520

The average lease terms and discount rates at June 30, 2021 are as follows:

The average lease terms and discount rates at September 30, 2021 are as follows:

Weighted-average remaining lease term (years) Weighted-average discount rate

1 unchanged sentence

Finance leases 12.5 8.2 %

The aggregate future lease payments for operating and finance leases at June 30, 2021 are as follows (in thousands):

The aggregate future lease payments for operating and finance leases at September 30, 2021 are as follows (in thousands):

Operating Finance

9 unchanged sentences

Present value of lease liabilities $ 20,905 $ 5,615

At June 30, 2021, we had no additional significant operating or finance leases that had not yet commenced.

At September 30, 2021, we had no additional significant operating or finance leases that had not yet commenced.

COMMITMENTS AND CONTINGENCIES

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On May 19, 2021, a putative class action against the Company and several of our subsidiaries was filed.

Plaintiff, a former employee, seeks monetary damages on behalf of himself and other similarly situated current and former non-exempt employees.

Plaintiff, a former employee, seeks monetary damages on behalf of himself and other similarly situated current and former non-exempt employees in California.

Plaintiff claims that the Company failed to, among other things, pay minimum wages, provide meal and rest breaks, pay overtime, provide accurately itemized wage statements, reimburse employees for business expenses, and provide wages when due.

At June 30, 2021, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

At September 30, 2021, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

STOCKHOLDERS ’ EQUITY

Restricted Stock

During the three months ended June 30, 2020 and 2021, we did not issue restricted stock.

We cancelled 966 shares of restricted stock in connection with an employee's termination of employment.

During the six months ended June 30, 2021, we issued restricted stock to certain employees totaling 9,300 shares that vest over a three-year period and had an aggregate grant date market value of $ 324,000 at a weighted average stock price of $ 34.79 .

In addition, 9,688 shares of vested restricted stock were returned for the payment of payroll taxes equivalent to $ 347,000 .

During the six months ended June 30, 2020, we issued restricted stock to certain employees totaling 10,200 shares that vest over a three-year period and had an aggregate grant date market value of $ 255,000 at a weighted average stock price of $ 25.00 .

In addition, 9,874 shares of vested restricted stock were returned for the payment of payroll taxes equivalent to $ 235,000 .

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for restricted stock awards of $ 183,000 and $ 98,000 , for the three months ended June 30, 2020 and 2021, respectively and $ 368,000 and $ 219,000 , for the six months ended June 30, 2020 and 2021, respectively.

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

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value

— $ — — $ — 10,200 $ 255 9,300 $ 324

Returned for payroll taxes 714 $ 16 711 $ 28 10,588 $ 250 10,399 $ 375

Cancelled — $ — — $ — — $ — 966 $ 27

(1) Restricted stock granted during the nine months ended September 30, 2020 and 2021 vest over a three-year period at a weighted average stock price of $ 25.00 and $ 34.79 , respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for restricted stock awards of $ 183,000 and $ 89,000 , for the three months ended September 30, 2020 and 2021, respectively and $ 551,000 and $ 308,000 , for the nine months ended September 30, 2020 and 2021, respectively.

Stock Options

During the three months ended June 30, 2021, we did not issue stock options.

During the six months ended June 30, 2021, we granted 701,400 options to certain key employees at a weighted average price of $ 34.79 .

These options will vest in one-fifth increments over a five-year period and have a ten-year term.

The fair value of these options was $ 7.1 million.

We also granted an additional 150,000 options to a certain key employee at a weighted average price of $ 34.79 .

These options will vest when the price of our common stock closes at or above the specified prices below for three consecutive days within the ten-year term and the employee has remained continuously employed by us through such date.

During the nine months ended September 30, 2021, we granted 150,000 options to a certain key employee at a weighted average price of $ 34.79 .

These options will vest when the price of our common stock closes at or above $ 53.39 ( 50,000 options) and $ 77.34 ( 100,000 options) for three consecutive days within the ten-year term and the employee has remained continuously employed by us through such date.

The fair value of these options was $ 1.7 million.

During the three and six months ended June 30, 2020, we granted 20,000 options to a certain key employee at a weighted average price of $ 18.02 .

On June 26, 2020, we cancelled 100,000 options in connection with the resignation of our President and Chief Operating Officer.

During the three months ended June 30, 2021, employees exercised 180,629 stock options of which 95,763 were surrendered by employees to pay the option price and taxes related to the option exercises.

These options were exercised at a weighted average exercise price of $ 20.44 with an aggregate intrinsic value of $ 3.1 million.

During the six months ended June 30, 2021, employees exercised 281,629 stock options of which 168,506 were surrendered by employees to pay the option price and taxes related to the option exercises.

These options were exercised at a weighted average exercise price of $ 21.78 with an aggregate intrinsic value of $ 4.4 million.

We received $ 1.7 million in cash for payment of the option price, of which $ 224,000 settled on July 2, 2021 and we withheld $ 976,000 for payment of payroll taxes.

In addition, in accordance with the terms of the separation agreement, we accelerated 12,980 options in connection with the resignation of an employee which resulted in an additional $ 129,000 of stock-based compensation expense.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for stock options, including the accelerated stock options discussed above of $ 122,000 and $ 480,000 , for the three months ended June 30, 2020 and 2021, respectively and $ 337,000 and $ 1,040,000 , for the six months ended June 30, 2020 and 2021, respectively.

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

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value

— $ — — $ — 20,000 $ 92 701,400 $ 7,115

Cancelled 8,800 $ 52 6,000 $ 61 146,034 $ 846 19,684 $ 181

(1) Stock options granted during the nine months ended September 30, 2020 and 2021 had a weighted average price of $ 18.02 and $ 34.79 , respectively.

The options granted in 2020 vest over a three-year period and have a ten-year term.

The options granted in 2021 vest over a five-year period and have a ten-year term.

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Cash Shares Cash Shares Cash Shares Cash

Exercised (1)

17,913 N/A 32,665 N/A 17,913 N/A 314,294 N/A

Returned for option price (2)

4,426 $ — 17,790 $ — 4,426 $ — 166,359 $ 880

Returned for payroll taxes (3)

1,333 $ 31 2,192 $ 82 1,333 $ 31 20,163 $ 1,058

(1) Stock options exercised during the three months ended September 30, 2020 and 2021 had a weighted average exercise price of $ 5.70 and $ 21.81 , respectively, with an aggregate intrinsic value of $ 0.3 million and $ 0.6 million, respectively.

Stock options exercised during the nine months ended September 30, 2020 and 2021 had a weighted average exercise price of $ 5.70 and $ 21.78 respectively, with an aggregate intrinsic value of $ 0.3 million and $ 5.0 million, respectively.

(2) Represents cash received for the payment of the option price.

(3) Represents cash withheld for the payment of payroll taxes.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for stock options, including the accelerated stock options discussed above of $ 165,000 and $ 467,000 , for the three months ended September 30, 2020 and 2021, respectively and $ 502,000 and $ 1,507,000 , for the nine months ended September 30, 2020 and 2021, respectively.

Performance Awards

During the three and six months ended June 30, 2021, we granted 10,254 performance awards to certain employees with a fair value of $ 0.4 million.

During the three and six months ended June 30, 2021, we cancelled 6,987 and 34,935 performance awards, respectively, in connection with the termination of employment for three employees.

On June 1, 2021, we amended the performance award agreements granted on May 19, 2020 for certain executive employees.

The amendment granted an additional 70,236 performance awards payable in shares to three of our executives.

These awards will vest (if at all) on December 31, 2024, provided that the Company’s common stock reaches one of three predetermined growth targets for a sustained period beginning on the grant date of June 1, 2021 and ending on December 31, 2024.

The additional grant was treated as a modification of the original performance award agreement and resulted in an additional $ 2.6 million of incremental compensation costs, which are expected to be recognized over the remaining term of 43 months.

The fair values of the performance awards granted during the three months ended June 30, 2021 were determined by using

the Monte-Carlo simulation pricing model with the following assumptions:

April 16, 2021 June 1, 2021

Performance Period April 16, 2021 - December 31, 2024 June 1, 2021 - December 31, 2024

During the nine months ended September 30, 2020 , we issued 237,500 performance awards to certain employees, payable in shares, with a fair value of $ 2.8 million.

On May 19, 2020, we cancelled all performance award agreements previously awarded to all individuals during 2019 and the February 19, 2020 award.

Concurrently with the cancellation, the Compensation Committee of the Board of Directors (the “Board”) approved 368,921 new performance awards to be issued to certain employees.

These new performance awards were treated as a modification of the cancelled awards and resulted in an additional $ 1.7 million of incremental compensation expense.

On June 1, 2021, we amended the performance award agreements granted on May 19, 2020 for three of our executives.

The amendment increased the amount of performance awards payable in shares for the last three predetermined growth targets.

These awards will vest (if at all) on December 31, 2024, provided that the Company’s common stock reaches the predetermined growth targets for the sustained period ending on December 31, 2024.

The amendment was treated as a modification of the original performance award agreement and resulted in an additional $ 2.6 million of incremental compensation expense, expected to be recognized over the remaining term of 43 months.

Additional performance award activity is as follows (in thousands, except shares):

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value

Granted 9,782 $ 244 29,548 $ 1,062 23,756 $ 469 39,802 $ 1,464

Cancelled — $ — 6,987 $ 101 33,538 $ 631 41,922 $ 598

The fair values of the performance awards granted during the nine months ended September 30, 2021 were determined by using the Monte-Carlo simulation pricing model with the following assumptions:

April 16, 2021 June 1, 2021 August 12, 2021 September 15, 2021

Performance Period April 16, 2021 - December 31, 2024 June 1, 2021 - December 31, 2024 August 12, 2021 - December 31, 2024 September 15, 2021 - December 31, 2024

Simulation period (years) 3.71 3.58 3.39 3.29

2 unchanged sentences

Risk-free interest rate 0.52 % 0.46 % 0.53 % 0.49 %

During the six months ended June 30, 2020 , we issued 237,500 performance awards to certain employees, payable in shares, with a fair value of $ 2.8 million.

On May 19, 2020, we cancelled all performance award agreements previously awarded to all individuals during 2019 and the February 19, 2020 award.

Concurrently with the cancellation, the Compensation Committee of the Board of Directors (the “Board”) approved 368,921 new performance awards to be issued to certain employees.

These new performance awards were treated as a modification of the cancelled awards and resulted in an additional $ 1.7 million of incremental compensation costs.

On June 25, 2020, we granted an additional 13,974 performance awards to our then Vice-President of Cemetery Sales and Marketing with a fair value of $ 0.2 million.

On June 26, 2020, we cancelled 33,538 performance awards in connection with the resignation of our President and Chief Operating Officer.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for performance awards of $ 182,000 and $ 352,000 for the three months ended June 30, 2020 and 2021, respectively and $ 303,000 and $ 589,000 for the six months ended June 30, 2020 and 2021, respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for performance awards of $ 286,000 and $ 475,000 for the three months ended September 30, 2020 and 2021, respectively and $ 589,000 and $ 1,064,000 for the nine months ended September 30, 2020 and 2021, respectively.

Employee Stock Purchase Plan

During the three months ended June 30, 2020 and 2021, employees purchased a total of 17,020 and 13,706 shares, respectively, at a weighted average price of $ 15.40 and $ 26.32 per share, respectively.

During the six months ended June 30, 2020 and 2021, employees purchased a total of 43,314 and 31,888 shares, respectively, at a weighted average price of $ 14.39 and $ 26.32 per share, respectively.

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

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Price Shares Price Shares Price Shares Price

ESPP 15,706 $ 18.96 14,734 $ 26.32 59,020 $ 15.60 46,622 $ 26.32

The fair value of the right (option) to purchase shares under the ESPP is estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:

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Expected life (years) 0.25 , 0.50 , 0.75 , 1.00

We recorded stock-based compensation expense, which is included in General, administrative and other expenses and Regional and unallocated funeral and cemetery costs , for the ESPP totaling $ 80,000 and $ 135,000 for the three months ended June 30, 2020 and 2021, respectively and $ 244,000 and $ 341,000 for the six months ended June 30, 2020 and 2021, respectively.

Non-Employee Director Compensation

During the three months ended June 30, 2021, we granted 4,333 shares of our common stock to six Directors and 135 shares of our common stock to an advisor to our Board, which were valued at $ 160,000 and $ 5,000 , respectively, at a weighted average stock price of $ 36.97 .

During the six months ended June 30, 2021, we granted 9,373 shares of our common stock to six Directors and 277 shares of our common stock to an advisor to our Board, which were valued at $ 338,000 and $ 10,000 , respectively, at a weighted average stock price of $ 36.01 .

During the three months ended June 30, 2020, we granted 7,859 shares of our common stock to five Directors, and 275 shares of common stock to an advisor to our Board, which were valued at $ 142,000 and $ 5,000 respectively at a weighted

average stock price of $ 18.12 .

During the six months ended June 30, 2020, we granted 16,680 shares of our common stock to five Directors, and 584 shares of common stock to an advisor to our Board, which were valued at $ 285,000 and $ 10,000 , respectively at a weighted average stock price of $ 17.08 .

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , related to annual retainers, including the value of stock granted to Directors and an advisor to our Board, of $ 201,000 and $ 219,000 for the three months ended June 30, 2020 and 2021, respectively and $ 402,000 and $ 455,000 for the six months ended June 30, 2020 and 2021, respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses and Regional and unallocated funeral and cemetery costs , for the ESPP totaling $ 95,000 and $ 117,000 for the three months ended September 30, 2020 and 2021, respectively and $ 339,000 and $ 458,000 for the nine months ended September 30, 2020 and 2021, respectively.

Non-Employee Director and Board Advisor Compensation

Non-Employee Director and Board Advisor common stock activity is as follows (in thousands, except shares):

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value

Board of Directors 8,540 $ 192 3,192 $ 142 25,220 $ 477 12,565 $ 480

Advisor to the Board 224 $ 6 112 $ 5 808 $ 15 389 $ 15

(1) Common stock granted during the three months ended September 30, 2020 and 2021 had a weighted average price of $ 26.79 and $ 44.59 , respectively.

Common stock granted during the nine months ended September 30, 2020 and 2021 had a weighted average price of $ 18.91 and $ 38.20 , respectively.

We recorded compensation expense, which is included in General, administrative and other expenses , related to annual retainers, including the value of stock granted to non-employee Directors and an advisor to our Board, of $ 250,000 and $ 201,000 for the three months ended September 30, 2020 and 2021, respectively and $ 653,000 and $ 656,000 for the nine months ended September 30, 2020 and 2021, respectively.

Share Repurchase

On May 18, 2021, our Board approved an additional $ 25.0 million under our share repurchase program in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

During the three and six months ended June 30, 2021, we repurchased 324,700 shares of common stock (of which 24,700 settled in July 2021) for a total cost of $ 12.3 million (of which $ 742,000 settled in July 2021) at an average cost of $ 37.88 per share pursuant to our share repurchase program.

On May 18, 2021 and July 26, 2021, our Board authorized increases of up to an additional $ 25.0 million, respectively, in our share repurchase program to permit us to purchase up to a total of $ 50.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding, in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Share repurchase activity is as follows (dollar value in thousands):

Three months ended September 30, 2021 Nine months ended September 30, 2021

Number of Shares Repurchased (1)

1,203,493 1,528,197

Average Price Paid Per Share $ 44.24 $ 42.89

Dollar Value of Shares Repurchased (1)

$ 53,239 $ 65,540

(1) During the three and nine months ended September 30, 2021, 84,000 shares settled in October 2021, which had a cost of $ 3.8 million.

Our shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations.

Shares purchased pursuant to the repurchase program are currently held as treasury shares.

At June 30, 2021, we had approximately $ 38.3 million available for repurchase under our share repurchase program.

See Note 18 to the Consolidated Financial Statements included herein for additional information related to our share repurchase program.

At September 30, 2021, we had approximately $ 10.1 million available for repurchase under our share repurchase program.

Cash Dividends

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$ 0.1000 $ 1,799

$ 0.1000 $ 1,808

September 1 st

$ 0.1000 $ 1,783

2020 Per Share Dollar Value

$ 0.0750 $ 1,339

$ 0.0750 $ 1,343

September 1 st

$ 0.0875 $ 1,569

EARNINGS PER SHARE

The following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2021 2020 2021

Numerator for basic and diluted earnings per share:

Net income (loss) $ 6,397 $ ( 6,167 ) $ 2,200 $ 6,766

Loss (earnings) allocated to unvested restricted stock ( 18 ) 8 ( 8 ) ( 13 )

Income (loss) attributable to common stockholders $ 6,379 $ ( 6,159 ) $ 2,192 $ 6,753

Net income $ 5,525 $ 13,046 $ 7,725 $ 19,812

Earnings allocated to unvested restricted stock ( 14 ) ( 18 ) ( 23 ) ( 33 )

Income attributable to common stockholders $ 5,511 $ 13,028 $ 7,702 $ 19,779

Denominator for basic earnings per common share - weighted average shares outstanding 17,895 17,499 17,853 17,809

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Stock options 34 235 39 277

Convertible Notes 3 — 1 —

Performance awards — 512 — 279

Denominator for diluted earnings per common share - weighted average shares outstanding 17,932 18,246 17,893 18,365

Basic earnings (loss) per common share:

Basic earnings per common share:

$ 0.31 $ 0.74 $ 0.43 $ 1.11

Diluted earnings (loss) per common share:

Diluted earnings per common share:

$ 0.31 $ 0.71 $ 0.43 $ 1.08

For the three and six months ended June 30, 2020 there were 1,017,383 and 1,025,734 stock options, respectively, excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an

antidilutive effect.

For the three and six months ended June 30, 2021, no stock options were excluded from the computation of diluted earnings per share.

For the three and nine months ended September 30, 2021, no stock options were excluded from the computation of diluted earnings per share.

For the three and nine months ended September 30, 2020 there were 765,722 and 848,513 stock options, respectively, excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect.

Our performance awards are considered to be contingently issuable shares because their issuance is contingent upon the satisfaction of certain performance and service conditions.

On April 1, 2021, our stock price reached $ 35.80 for an average of twenty days, thus meeting the performance criteria for the first tranche of performance awards to be considered outstanding and therefore, included in the computation of diluted earnings per share as of the beginning of the reporting period.

At September 30, 2021, we had satisfied certain performance criteria for the first and second predetermined growth targets of our performance awards to be considered outstanding.

Therefore, we included these awards in the computation of diluted earnings per share as of the beginning of the reporting period.

SEGMENT REPORTING

Revenue, disaggregated by major source for each of our reportable segments was as follows (in thousands):

Three months ended June 30, 2021

Three months ended September 30, 2021

Funeral Cemetery Total

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Total $ 68,897 $ 26,144 $ 95,041

Three months ended June 30, 2020

Three months ended September 30, 2020

Funeral Cemetery Total

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Total $ 61,434 $ 22,959 $ 84,393

Six months ended June 30, 2021

Nine months ended September 30, 2021

Funeral Cemetery Total

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Total $ 200,503 $ 79,452 $ 279,955

Six months ended June 30, 2020

Nine months ended September 30, 2020

Funeral Cemetery Total

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Operating income (loss):

Three months ended June 30, 2021 $ 16,604 $ 11,498 $ ( 7,178 ) $ 20,924

Three months ended June 30, 2020 19,869 5,291 ( 6,894 ) 18,266

Six months ended June 30, 2021 $ 42,480 $ 20,991 $ ( 16,301 ) $ 47,170

Six months ended June 30, 2020 24,180 9,458 ( 13,222 ) 20,416

Three months ended September 30, 2021 $ 22,924 $ 9,471 $ ( 9,130 ) $ 23,265

Three months ended September 30, 2020 13,975 8,982 ( 6,463 ) 16,494

Nine months ended September 30, 2021 $ 65,404 $ 30,462 $ ( 25,431 ) $ 70,435

Nine months ended September 30, 2020 38,155 18,440 ( 19,685 ) 36,910

Income (loss) before income taxes:

Three months ended June 30, 2021 $ 16,462 $ 11,552 $ ( 38,373 ) $ ( 10,359 )

Three months ended June 30, 2020 19,674 5,348 ( 15,176 ) 9,846

Six months ended June 30, 2021 $ 42,174 $ 21,028 $ ( 54,987 ) $ 8,215

Six months ended June 30, 2020 23,792 9,453 ( 29,746 ) 3,499

Three months ended September 30, 2021 $ 22,777 $ 9,508 $ ( 14,117 ) $ 18,168

Three months ended September 30, 2020 13,753 9,024 ( 14,393 ) 8,384

Nine months ended September 30, 2021 $ 64,951 $ 30,537 $ ( 69,105 ) $ 26,383

Nine months ended September 30, 2020 37,481 18,538 ( 44,136 ) 11,883

Total assets:

June 30, 2021 $ 765,492 $ 387,979 $ 15,532 $ 1,169,003

September 30, 2021 $ 764,569 $ 385,573 $ 13,833 $ 1,163,975

December 31, 2020 764,535 366,964 14,326 1,145,825

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The following table presents t he detail of certain balance sheet accounts (in thousands):

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Prepaid and other current assets:

Prepaid expenses $ 1,919 $ 2,018

Federal income taxes receivable — 498

State income taxes receivable — 49

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Current portion of debt and lease obligations:

Current portion of acquisition debt $ 1,027 $ 814

Current portion of finance lease obligations 323 340

Current portion of operating lease obligations 2,082 2,018

Acquisition debt $ 1,027 $ 730

Finance lease obligations 323 357

Operating lease obligations 2,082 1,954

Total current portion of debt and lease obligations $ 3,432 $ 3,041

Accrued and other liabilities:

Accrued salaries and wages $ 1,392 $ 4,756

Accrued incentive compensation 11,139 9,144

Accrued vacation 3,271 3,433

Accrued insurance 3,016 3,432

Accrued interest 2,291 2,308

Accrued ad valorem and franchise taxes 435 1,593

Incentive compensation $ 11,139 $ 13,472

Interest 2,291 6,572

Insurance 3,016 3,995

Unrecognized tax benefit 3,656 3,735

Salaries and wages 1,392 3,533

Vacation 3,271 3,222

Income tax payable 798 799

Ad valorem and franchise taxes 435 2,115

Employer payroll tax deferral 1,773 1,773

Accrued commissions 634 791

Employee meetings and award trips 801 1,110

Commissions 634 861

Perpetual care trust payable 908 500

Income tax payable 798 —

Other accrued liabilities 1,024 1,460

Unrecognized tax benefit 3,656 3,710

Total accrued and other liabilities $ 31,138 $ 43,147

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Employer payroll tax deferral 1,773 1,773

Accrued severance — 417

Severance — 277

Total other long-term liabilities $ 4,748 $ 3,045

The following information is supplemental disclosure for the Consolidated Statements of Cash Flows (in thousands):

Six months ended June 30,

Nine months ended September 30,

Cash paid for interest $ 16,960 $ 14,817

Cash paid for taxes 177 7,663

Cash paid (refunded) for taxes ( 6,817 ) 9,974

Fair value of donated real property — 635

SUBSEQUENT EVENTS

On July 26, 2021, the Board authorized an increase in the Company’s share repurchase program to permit the Company to purchase up to an additional $ 25 million of its outstanding common shares.

Prior to the Board’s approval of the increase, as of June 30, 2021, the Company had approximately $ 38.3 million authorization remaining under the original repurchase program.

Accordingly, as of July 26, 2021, the Company had approximately $ 63.3 million of share repurchase authorization remaining under the revised repurchase program.

The Company may repurchase shares from time to time in the open market or in other privately negotiated transactions, subject to market conditions and applicable Security and Exchange Commission rules.

On and effective July 28, 2021, the Board approved a second amendment and restatement to the Company’s Amended and Restated By-laws (as so amended and restated, the Second Amended and Restated By-laws) to implement, amongst other changes, an exclusive forum bylaw provision.

On October 21, 2021, we sold real property for $ 1.4 million.

On October 27, 2021, the Board authorized an increase in our share repurchase program to permit us to purchase up to an additional $ 75 million of our outstanding common shares.

Prior to the Board’s approval of the increase, at September 30, 2021, we had approximately $ 10.1 million authorization remaining under the original repurchase program.

At October 27, 2021, we had approximately $ 85.1 million of share repurchase authorization remaining under the revised repurchase program.

On October 27, 2021, the Board also approved a $ 0.05 per share increase to its annual cash dividend and subsequently declared a quarterly dividend of $ 0.1125 per share payable on December 1, 2021 to common share record holders as of November 9, 2021.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements