What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 281 added, 167 removed, 891 unchanged (33% of the section changed)

3 unchanged sentences

(unaudited and in thousands, except share data)

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Current assets:

49 unchanged sentences

(unaudited and in thousands, except per share data)

Three months ended March 31,

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

2024 2023 2024 2023

Service revenue $ 44,433 $ 44,522 $ 94,132 $ 92,729

16 unchanged sentences

Interest expense 8,324 9,396 17,036 17,935

Loss on property damage, net of insurance claims 271 —

Net (gain) loss on property damage, net of insurance claims ( 417 ) ( 235 ) ( 417 ) 36

Other, net 3 ( 125 ) 46 ( 647 )

1 unchanged sentence

Expense for income taxes 3,513 3,273 7,032 6,841

(Benefit) expense related to discrete income tax items ( 66 ) 230

Expense related to discrete income tax items 687 143 917 77

Total expense for income taxes 4,200 3,416 7,949 6,918

13 unchanged sentences

(unaudited and in thousands)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Stock-based compensation expense 2,671 4,163

Deferred income tax benefit ( 178 ) ( 2,342 )

Deferred income tax (benefit) expense ( 1,477 ) 7

Amortization of intangibles 669 647

2 unchanged sentences

Net loss on divestitures, disposals and impairment charges 1,568 506

Loss on property damage, net of insurance claims 271 —

(Gain) loss on property damage, net of insurance claims ( 417 ) 36

Gain on sale of excess land — ( 658 )

6 unchanged sentences

Accrued and other liabilities ( 3,999 ) ( 3,328 )

Incentive payment from vendor — 6,000

Deferred preneed funeral and cemetery revenue 7,064 8,106

6 unchanged sentences

Capital expenditures ( 7,096 ) ( 8,960 )

Net cash (used in) provided by investing activities ( 47,286 ) 7,372

Net cash provided by (used in) investing activities 4,392 ( 49,895 )

Cash flows from financing activities:

5 unchanged sentences

Dividends paid on common stock ( 3,390 ) ( 3,340 )

Net cash provided by (used in) financing activities 21,540 ( 26,909 )

Net increase in cash and cash equivalents 123 166

Net cash (used in) provided by financing activities ( 26,272 ) 10,508

Net decrease in cash and cash equivalents ( 20 ) ( 200 )

Cash and cash equivalents at beginning of period 1,523 1,170

4 unchanged sentences

(unaudited and in thousands)

Three months ended March 31, 2023

Three months ended June 30, 2024

Outstanding Common

2 unchanged sentences

Earnings Treasury

Balance – March 31, 2024 15,165 $ 268 $ 240,811 $ 217,229 $ ( 278,753 ) $ 179,555

Net income — — — 6,259 — 6,259

Issuance of common stock from employee stock purchase plan 15 — 324 — — 324

Issuance of common stock to directors and board advisor 6 — 151 — — 151

Exercise of stock options 50 1 1,271 — — 1,272

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

Stock-based compensation expense — — 2,031 — — 2,031

Dividends on common stock — — ( 1,704 ) — — ( 1,704 )

Balance – June 30, 2024 15,236 $ 269 $ 242,883 $ 223,488 $ ( 278,753 ) $ 187,887

Three months ended June 30, 2023

Outstanding Common

Stock Additional

Capital Retained

Earnings Treasury

Balance – March 31, 2023 14,935 $ 266 $ 239,962 $ 185,687 $ ( 278,753 ) $ 147,162

Net income — — — 8,286 — 8,286

Issuance of common stock from employee stock purchase plan 16 — 397 — — 397

Issuance of common stock to directors and board advisor 2 — 65 — — 65

Exercise of stock options 4 — ( 20 ) — — ( 20 )

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

Stock-based compensation expense — — 1,957 — — 1,957

Dividends on common stock — — ( 1,679 ) — — ( 1,679 )

Balance – June 30, 2023 14,958 $ 266 $ 240,681 $ 193,973 $ ( 278,753 ) $ 156,167

Six months ended June 30, 2024

Outstanding Common

Stock Additional

Capital Retained

Earnings Treasury

Balance – December 31, 2023 15,000 $ 266 $ 241,291 $ 210,256 $ ( 278,753 ) $ 173,060

9 unchanged sentences

Other 31 — 790 — — 790

Balance – March 31, 2023 14,935 $ 266 $ 239,962 $ 185,687 $ ( 278,753 ) $ 147,162

Three months ended March 31, 2024

Balance – June 30, 2024 15,236 $ 269 $ 242,883 $ 223,488 $ ( 278,753 ) $ 187,887

Six months ended June 30, 2023

Outstanding Common

6 unchanged sentences

Issuance of common stock to directors and board advisor 6 — 177 — — 177

Issuance of common stock to former executive 30 — 826 — — 826

Issuance of restricted common stock 142 2 ( 2 ) — — —

Exercise of stock options 5 — ( 41 ) — — ( 41 )

Cancellation and surrender of restricted common stock ( 3 ) — ( 78 ) — — ( 78 )

2 unchanged sentences

Other 8 — 276 — — 276

Balance – March 31, 2024 15,165 $ 268 $ 240,811 $ 217,229 $ ( 278,753 ) $ 179,555

Balance – June 30, 2023 14,958 $ 266 $ 240,681 $ 193,973 $ ( 278,753 ) $ 156,167

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

6 unchanged sentences

Funeral Home Operations, which currently accounts for approximately 65 % of our total revenue, and Cemetery Operations, which currently accounts for approximately 35 % of our total revenue.

At March 31, 2024, we operated 165 funeral homes in 26 states and 31 cemeteries in 11 states.

At June 30, 2024, we operated 164 funeral homes in 26 states and 31 cemeteries in 11 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.

19 unchanged sentences

Inventory is relieved using specific identification in fulfillment of performance obligations on our contracts.

Contingent Liability

We recognize a contingent liability when both i) it is probable that a loss has been incurred and ii) the amount of the loss is reasonably estimable.

In evaluating these two conditions, we consider all relevant information that is available as of the date the financial statements are issued.

During the three and six months ended June 30, 2024, we recorded a $ 5.0 million contingent liability to reflect our agreement to pay our financial advisor in connection with the review of strategic alternatives.

Deferred Revenue

During the three months ended March 31, 2023, we withdrew $ 7.0 million of realized capital gains and earnings from our preneed funeral and cemetery trust investments.

We did not withdraw any realized capital gains and earnings from our preneed trust investments during the three months ended March 31, 2024.

During the six months ended June 30, 2023, we withdrew $ 8.6 million of realized capital gains and earnings from our preneed funeral and cemetery trust investments.

We did not withdraw any realized capital gains and earnings from our preneed trust investments during the six months ended June 30, 2024.

In certain states, we are allowed to make these withdrawals prior to the delivery of preneed merchandise and service contracts.

The realized capital gains and earnings withdrawn increase our cash flow from operations, but are not recognized as revenue in our Consolidated Statements of Operations, however, they reduce our Preneed funeral trust investments and Preneed cemetery trust investments and increase our Deferred preneed funeral revenue and Deferred preneed cemetery revenue.

Additionally, during the three and six months ended June 30, 2023, we received a $ 6.0 million incentive payment from a vendor for entering into a strategic partnership agreement to market and sell prearranged funeral services in the future, which increased our cash flow from operations and Deferred preneed funeral revenue.

The incentive payment is subject to partial claw-back if certain preneed funeral sales volumes are not met within the ten-year term of the agreement.

As such, we will recognize the incentive payment in proportion to our achieved preneed funeral sales volume per the agreement at each reporting period.

Property, Plant and Equipment

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Land $ 86,829 $ 87,635

4 unchanged sentences

Property, plant and equipment, net $ 280,355 $ 287,484

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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the three months ended March 31, 2023, we acquired $ 12.8 million of property, plant and equipment related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

Our growth and maintenance capital expenditures totaled $ 2.9 million and $ 1.6 million for the three months ended March 31, 2023 and 2024, respectively.

In addition, we recorded depreciation expense of $ 3.5 million and $ 3.6 million for the three months ended March 31, 2023 and 2024, respectively.

During the six months ended June 30, 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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Additionally, we sold real property for $ 0.3 million, with a carrying value of $ 0.3 million.

At June 30, 2024, we had $ 0.5 million of assets classified as held for sale in Property, plant and equipment, net on our Consolidated Balance Sheet related to one funeral home that we intend to divest within the next six months.

During the six months ended June 30, 2023, we acquired $ 12.8 million of property, plant and equipment related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

Additionally, we sold real property for $ 1.2 million, with a carrying value of $ 0.6 million, resulting in a gain on the sale of $ 0.6 million, which was recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Our growth and maintenance capital expenditures totaled $ 1.9 million and $ 2.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.5 million and $ 5.5 million for the six months ended June 30, 2024 and 2023, respectively.

In addition, we recorded depreciation expense of $ 3.5 million and $ 3.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 7.2 million for both the six months ended June 30, 2024 and 2023.

Cemetery Property

Cemetery property was $ 114.6 million and $ 114.0 million, net of accumulated amortization of $ 64.6 million and $ 66.2 million at December 31, 2023 and March 31, 2024, respectively.

Cemetery property was $ 113.3 million and $ 114.6 million, net of accumulated amortization of $ 68.7 million and $ 64.6 million at June 30, 2024 and December 31, 2023, 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 $ 2.1 million and $ 2.0 million for the three months ended March 31, 2023 and 2024, respectively.

We recorded amortization expense for cemetery interment rights of $ 1.2 million and $ 1.8 million for the three months ended March 31, 2023 and 2024, respectively.

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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the three months ended March 31, 2023, we acquired cemetery property for $ 9.0 million related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

Our growth capital expenditures for cemetery property development totaled $ 1.6 million and $ 1.4 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.6 million and $ 3.5 million for the six months ended June 30, 2024 and 2023, respectively.

We recorded amortization expense for cemetery

interment rights of $ 2.6 million and $ 1.9 million for the three months ended June 30, 2024 and 2023, respectively, and $ 4.3 million and $ 3.1 million for the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the six months ended June 30, 2023, we acquired cemetery property for $ 9.0 million related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

We also sold two cemeteries that had a carrying value of cemetery property of $ 0.8 million, which was included in the loss on sale and recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Income tax expense was $ 3.5 million and $ 3.7 million for the three months ended March 31, 2023 and 2024, respectively.

Our operating tax rate before discrete items was 28.9 % and 32.8 % for the three months ended March 31, 2023 and 2024, respectively.

Income tax expense was $ 4.2 million and $ 3.4 million for the three months ended June 30, 2024 and 2023, respectively, and $ 7.9 million and $ 6.9 million for the six months ended June 30, 2024 and 2023, respectively.

Our operating tax rate before discrete items was 33.6 % and 28.0 % for the three months ended June 30, 2024 and 2023, respectively, and 33.2 % and 28.5 % for the six months ended June 30, 2024 and 2023, respectively.

Subsequent Events

We have evaluated events and transactions during the period subsequent to March 31, 2024 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 June 30, 2024 through the date the financial statements were issued for potential recognition or disclosure in the accompanying financial statements covered by this report.

RECENTLY ISSUED ACCOUNTING STANDARDS

22 unchanged sentences

To the extent that information not available to us at the closing date subsequently becomes available during the measurement period, we may adjust goodwill, intangible assets, assets or liabilities associated with the acquisition.

We did not acquire any businesses during the three months ended March 31, 2024.

We did not acquire any businesses during the three and six months ended June 30, 2024.

On March 22, 2023, we acquired a business consisting of three funeral homes, two cemeteries and one cremation focused business in the Bakersfield, CA area for $ 44.0 million in cash.

24 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Goodwill at the beginning of the period $ 423,643 $ 410,137

2 unchanged sentences

Goodwill at the end of the period $ 414,895 $ 423,643

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 for a loss recorded in Net loss on divestitures, disposals and impairments charges, of which $ 7.8 million was allocated to our funeral homes segment and $ 1.0 million was allocated to our cemetery segment.

During the three months ended March 31, 2023, we recognized $ 13.5 million in goodwill related to our acquisition of a business located in Bakersfield, CA, of which $ 4.5 million was allocated to our cemetery segment and $ 9.0 million was allocated to our funeral home segment.

During the six months ended June 30, 2024, we allocated $ 8.7 million of goodwill to the sale of six funeral homes and one cemetery for a loss recorded in Net loss on divestitures, disposals and impairments charges, of which $ 7.8 million was allocated to our funeral homes segment and $ 1.0 million was allocated to our cemetery segment.

During the six months ended June 30, 2023, we recognized $ 13.5 million in goodwill related to our acquisition of a business located in Bakersfield, CA, of which $ 4.5 million was allocated to our cemetery segment and $ 9.0 million was allocated to our funeral home segment.

DIVESTED OPERATIONS

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

During the three months ended March 31, 2023, we sold one funeral home and two cemeteries for an aggregate of $ 0.8 million.

During the three months ended June 30, 2024, we merged one funeral home with another business we own in an existing market.

During the six months ended June 30, 2024, we sold six funeral homes and one cemetery for an aggregate of $ 10.9 million and merged one funeral home with another business we own in an existing market.

During the three months ended June 30, 2023, we merged one funeral home with another business we own in an existing market.

During the six months ended June 30, 2023, we sold one funeral home and two cemeteries for an aggregate of $ 0.8 million and merged one funeral home with another business we own in an existing market .

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,

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

2024 2023 2024 2023

Revenue $ 121 $ — $ 1,272 $ 66

Operating income 26 122

Operating income (loss) 33 ( 2 ) 151 24

Loss on divestitures (1)

( 8 ) — ( 1,509 ) ( 82 )

Income tax benefit 16 452

Net loss from divested operations, after tax $ ( 40 ) $ ( 927 )

Income tax (expense) benefit ( 8 ) 1 451 17

Net gain (loss) from divested operations, after tax $ 17 $ ( 1 ) $ ( 907 ) $ ( 41 )

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

4 unchanged sentences

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

March 31, 2024

June 30, 2024

Funeral Cemetery Corporate Total

12 unchanged sentences

The following table summarizes the activity in our allowance for credit losses by segment (in thousands):

January 1, 2024 Provision for Credit Losses Write Offs Recoveries March 31, 2024

January 1, 2024 Provision for Credit Losses Write Offs Recoveries June 30, 2024

Trade and financed receivables:

2 unchanged sentences

Total allowance for credit losses on trade and financed receivables $ ( 1,506 ) $ ( 934 ) $ 1,324 $ ( 473 ) $ ( 1,589 )

Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheet of $ 10.7 million at both December 31, 2023 and March 31, 2024.

Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheet of $ 10.8 million and $ 10.7 million at June 30, 2024 and December 31, 2023, respectively.

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

2 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Interment rights $ 71,864 $ 60,863

3 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Cemetery receivables $ 90,846 $ 77,755

6 unchanged sentences

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

January 1, 2024 Provision for Credit Losses Write Offs March 31, 2024

January 1, 2024 Provision for Credit Losses Write Offs June 30, 2024

Total allowance for credit losses on Preneed cemetery receivables, net

$ ( 2,255 ) $ ( 513 ) $ 511 $ ( 2,257 )

The amortized cost basis of our cemetery receivables by year of origination at March 31, 2024 is as follows (in thousands):

The amortized cost basis of our cemetery receivables by year of origination at June 30, 2024 is as follows (in thousands):

2024 2023 2022 2021 2020 Prior Total

Total preneed cemetery receivables, at amortized cost $ 27,655 $ 27,698 $ 16,244 $ 7,837 $ 3,062 $ 1,884 $ 84,380

The aging of past due cemetery receivables at March 31, 2024 is as follows (in thousands):

The aging of past due cemetery receivables at June 30, 2024 is as follows (in thousands):

Past Due 61-90

7 unchanged sentences

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 $ 15.8 million and $ 16.5 million at December 31, 2023 and March 31, 2024, respectively.

The transaction price allocated to preneed merchandise and service performance obligations that were unfulfilled were $ 14.6 million and $ 15.8 million at June 30, 2024 and December 31, 2023, respectively.

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

5 unchanged sentences

Our acquisition debt and Credit Facility (as defined in Note 11) and Senior Notes (as defined in Note 12) are classified within Level 2 of the Fair Value Measurements hierarchy.

At March 31, 2024, the carrying value and fair value of our Credit Facility was $ 154.1 million.

At June 30, 2024, the carrying value and fair value of our Credit Facility was $ 155.0 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, 2024, the carrying value of our acquisition debt was $ 6.0 million, which approximated its fair value.

The fair value of our Senior Notes was $ 355.2 million at March 31, 2024 based on the last traded or broker quoted price.

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, 2024, the carrying value of our acquisition debt was $ 6.0 million, which approximated its fair value.

The fair value of our Senior Notes was $ 357.0 million at June 30, 2024 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 Sheet as having met the criteria for fair value measurement.

7 unchanged sentences

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.

Beginning March 31, 2024, the agreement permits us to withdraw a percentage of the value of the investments in this fund through quarterly withdrawal dates with the intention to permit withdrawal of the entire investment over twelve successive withdrawal dates.

Our unfunded commitment for this investment at March 31, 2024 was $ 10.0 million.

Beginning March 31, 2024, the agreement permits us to withdraw a percentage of the value of the investments in this fund through quarterly withdrawals with the intention to permit withdrawal of the entire investment over twelve successive withdrawal dates.

Our unfunded commitment for this investment at June 30, 2024 was $ 10.0 million.

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.

12 unchanged sentences

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.

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.

2 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Preneed cemetery trust investments, at market value $ 103,516 $ 99,461

1 unchanged sentence

Preneed cemetery trust investments $ 100,285 $ 96,374

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

The cost and market values associated with preneed cemetery trust investments at June 30, 2024 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

43 unchanged sentences

Market value as a percentage of cost 95.8 %

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, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

March 31, 2024

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at June 30, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2024

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

19 unchanged sentences

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,

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

2024 2023 2024 2023

Investment income $ 844 $ 689 $ 1,383 $ 1,279

1 unchanged sentence

Realized losses ( 4,747 ) ( 269 ) ( 8,511 ) ( 1,146 )

Unrealized losses, net ( 12,153 ) ( 6,959 )

Unrealized gains (losses), net 2,023 3,439 ( 4,936 ) ( 8,714 )

Expenses and taxes ( 705 ) ( 316 ) ( 1,339 ) ( 622 )

Net change in deferred preneed cemetery receipts held in trust 1,661 ( 4,271 ) 1,903 7,202

$ — $ — $ — $ —

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

Three months ended March 31,

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

2024 2023 2024 2023

Purchases $ ( 6,784 ) $ ( 2,784 ) $ ( 11,110 ) $ ( 9,138 )

4 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Preneed funeral trust investments, at market value $ 113,196 $ 111,247

1 unchanged sentence

Preneed funeral trust investments $ 109,701 $ 107,842

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

The cost and market values associated with preneed funeral trust investments at June 30, 2024 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

3 unchanged sentences

Fixed income securities:

U.S treasury debt 1 405 — ( 37 ) 368

treasury debt 1 406 — ( 37 ) 369

Foreign debt 2 8,115 1,340 ( 10 ) 9,445

37 unchanged sentences

Market value as a percentage of cost 97.3 %

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, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

March 31, 2024

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at June 30, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2024

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

17 unchanged sentences

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

Three months ended March 31,

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

2024 2023 2024 2023

Investment income $ 675 $ 577 $ 1,111 $ 1,063

1 unchanged sentence

Realized losses ( 4,295 ) ( 260 ) ( 7,504 ) ( 1,097 )

Unrealized losses, net ( 10,585 ) ( 5,848 )

Unrealized gains (losses), net 1,873 3,380 ( 3,975 ) ( 7,205 )

Expenses and taxes ( 296 ) ( 202 ) ( 667 ) ( 394 )

Net change in deferred preneed funeral receipts held in trust 1,197 ( 4,198 ) 409 5,690

$ — $ — $ — $ —

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

Three months ended March 31,

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

2024 2023 2024 2023

Purchases $ ( 6,211 ) $ ( 2,687 ) $ ( 10,214 ) $ ( 8,750 )

3 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Cemetery perpetual care trust investments, at market value $ 84,780 $ 85,331

Obligations (due from) due to trust ( 980 ) 198

Obligations due to (due from) trust 1,414 ( 980 )

Care trusts’ corpus $ 86,194 $ 84,351

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

The following table reflects the cost and market values associated with the trust investments held in cemetery perpetual care trust funds at June 30, 2024 (in thousands):

Fair Value Hierarchy Level Cost Unrealized

39 unchanged sentences

Market value as a percentage of cost 95.7 %

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

March 31, 2024

The following table summarizes our fixed income securities (excluding mutual funds) within our cemetery perpetual care trust investment in an unrealized loss position at June 30, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

June 30, 2024

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

15 unchanged sentences

Cemetery 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,

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

2024 2023 2024 2023

Realized gains $ 113 $ 671 $ 1,419 $ 831

Realized losses ( 663 ) ( 293 ) ( 1,089 ) ( 470 )

Unrealized losses, net ( 9,073 ) ( 6,069 )

Unrealized gains (losses), net 1,840 1,746 ( 4,229 ) ( 7,327 )

Net change in care trusts’ corpus ( 1,290 ) ( 2,124 ) 3,899 6,966

1 unchanged sentence

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

Three months ended March 31,

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

2024 2023 2024 2023

Investment income $ 3,495 $ 2,881 $ 6,624 $ 6,078

2 unchanged sentences

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

Three months ended March 31,

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

2024 2023 2024 2023

Purchases $ ( 5,464 ) $ ( 2,310 ) $ ( 9,113 ) $ ( 6,711 )

4 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Preneed funeral trust funds, at cost $ 22,757 $ 22,196

1 unchanged sentence

Receivables from preneed funeral trusts, net $ 22,074 $ 21,530

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 December 31, 2023 and March 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 funeral trust funds at March 31, 2024 is as follows (in thousands):

The composition of the preneed funeral trust funds at June 30, 2024 is as follows (in thousands):

Cost Basis Fair Value

13 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Tradenames $ 28,713 $ 28,862

Capitalized commissions on preneed contracts, net of accumulated amortization of $ 4,199 and $ 3,788 , respectively

Prepaid agreements not-to-compete, net of accumulated amortization of $ 3,158 and $ 3,276 , respectively

Internal-use software, net of accumulated amortization of $ 612 and $ 444 , respectively

Prepaid agreements not-to-compete, net of accumulated amortization of $ 3,309 and $ 3,158 , respectively

Other 306 380

1 unchanged sentence

Our tradenames 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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the six months ended June 30, 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 loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Capitalized Commissions

1 unchanged sentence

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, 2023 and 2024.

Prepaid Agreements

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, 2023 and 2024.

Amortization expense was $ 0.2 million for both the three months ended June 30, 2024, and 2023 and $ 0.4 million for both the six months ended June 30, 2024 and 2023.

Internal-use Software

Internal-use 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, 2023 and 2024.

The aggregate amortization expense for our capitalized commissions, prepaid agreements and internal-use software as of March 31, 2024 is as follows (in thousands):

Capitalized Commissions Prepaid Agreements Internal-use Software

Amortization expense was $ 0.1 million for both the three months ended June 30, 2024 and 2023, and $ 0.2 million and $ 0.1 million for the six months ended June 30, 2024 and 2023, respectively.

Prepaid Agreements

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 June 30, 2024, and 2023 and $ 0.2 million and $ 0.3 million for the six months ended June 30, 2024 and 2023, respectively.

The aggregate amortization expense for our capitalized commissions, internal-use software and prepaid agreements as of June 30, 2024 is as follows (in thousands):

Capitalized Commissions Internal-use Software Prepaid Agreements

Years ending December 31,

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CREDIT FACILITY AND ACQUISITION DEBT

At March 31, 2024, our senior secured revolving credit facility (the “Credit Facility”) was comprised of:

At June 30, 2024, our senior secured revolving credit facility (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.

The final maturity of the Credit Facility will occur on May 13, 2026.

See Note 18 to the Consolidated Financial Statements for more information on the Credit Facility.

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 12) and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”).

1 unchanged sentence

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, pay dividends and make other restricted payments, and certain financial maintenance covenants.

At March 31, 2024, we were subject to the following financial covenants under our Credit Facility:

At June 30, 2024, we were subject to the following financial covenants under our Credit Facility:

(A) a Total Leverage Ratio not to exceed 5.50 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, 2024.

We were in compliance with all of the covenants contained in our Credit Facility at June 30, 2024.

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Credit Facility $ 155,000 $ 179,100

5 unchanged sentences

Total acquisition debt, net of current portion $ 5,388 $ 5,461

At March 31, 2024, we had outstanding borrowings under the Credit Facility of $ 154.1 million.

At June 30, 2024, we had outstanding borrowings under the Credit Facility of $ 155.0 million.

We also had one letter of credit for $ 2.6 million under the Credit Facility.

The letter of credit will expire on November 25, 2024 and is expected to automatically renew annually and secures our obligations under our various self-insured policies.

At March 31, 2024, we had $ 93.3 million of availability under the Credit Facility.

The letter of credit will expire on November 25, 2024 and is expected to

automatically renew annually and secures our obligations under our various self-insured policies.

At June 30, 2024, we had $ 92.4 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,

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

2024 2023 2024 2023

Credit Facility interest expense $ 3,523 $ 4,668 $ 7,439 $ 8,479

Credit Facility amortization of debt issuance costs 138 138 276 276

Outstanding borrowings under our Credit Facility bear interest at a prime rate or the Bloomberg Short-Term Bank Yield Index (“BSBY”) rate, plus an applicable margin based on our leverage ratio.

At March 31, 2024, the prime rate margin was equivalent to 2.375 % and the BSBY rate margin was 3.375 %.

The weighted average interest rate on our Credit Facility was 7.9 % and 8.9 % for the three months ended March 31, 2023 and 2024, respectively.

At June 30, 2024, our outstanding borrowings under our Credit Facility bore interest at a prime rate or the Bloomberg Short-Term Bank Yield Index (“BSBY”) rate, plus an applicable margin based on our leverage ratio.

At June 30, 2024, the prime rate margin was equivalent to 2.125 % and the BSBY rate margin was 3.125 %.

The weighted average interest rate on our Credit Facility was 8.7 % and 8.6 % for the three months ended June 30, 2024 and 2023, respectively, and 8.8 % and 8.3 % for the six months ended June 30, 2024 and 2023, 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 five to twenty years .

Original maturities 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,

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

2024 2023 2024 2023

Acquisition debt imputed interest expense $ 103 $ 71 $ 207 $ 142

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Long-term liabilities:

5 unchanged sentences

Carrying value of the Senior Notes $ 396,247 $ 395,905

At March 31, 2024, the fair value of the Senior Notes, which are Level 2 measurements, was $ 355.2 million.

At June 30, 2024, the fair value of the Senior Notes, which are Level 2 measurements, was $ 357.0 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.

4 unchanged sentences

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,

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

2024 2023 2024 2023

Senior Notes interest expense $ 4,250 $ 4,250 $ 8,500 $ 8,500

2 unchanged sentences

The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 59 months of the Senior Notes.

The effective interest rate on the unamortized debt discount and the

unamortized debt issuance costs for the Senior Notes for both the three months ended March 31, 2023 and 2024 was 4.42 % and 4.30 %, respectively.

The effective interest rate on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for both the three and six months ended June 30, 2024 and 2023 was 4.42 % and 4.30 %, respectively.

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,

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

Income Statement Classification 2024 2023 2024 2023

Operating lease cost Facilities and grounds expense (1)

$ 999 $ 917 $ 1,977 $ 1,792

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

Variable lease cost Facilities and grounds expense (1)

88 56 192 114

Finance lease cost:

Depreciation of leased assets Depreciation and amortization (2)

$ 126 $ 109 $ 252 $ 217

Interest on lease liabilities Interest expense 122 103 247 208

4 unchanged sentences

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

Three months ended March 31,

Six months ended June 30,

Cash paid for operating leases included in operating activities $ 2,149 $ 1,934

1 unchanged sentence

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

Three months ended March 31,

Six months ended June 30,

Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,023 $ 1,067

1 unchanged sentence

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

Lease Type Balance Sheet Classification December 31, 2023 March 31, 2024

Lease Type Balance Sheet Classification June 30, 2024 December 31, 2023

Operating lease right-of-use assets Operating lease right-of-use assets $ 16,058 $ 16,295

9 unchanged sentences

Total lease liabilities $ 23,920 $ 24,933

The average lease terms and discount rates at March 31, 2024 are as follows:

The average lease terms and discount rates at June 30, 2024 are as follows:

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

1 unchanged sentence

Finance leases 10.2 8.3 %

The aggregate future lease payments for non-cancelable operating and finance leases at March 31, 2024 are as follows (in thousands):

The aggregate future lease payments for non-cancelable operating and finance leases at June 30, 2024 are as follows (in thousands):

Operating Finance

9 unchanged sentences

Present value of lease liabilities $ 18,106 $ 5,814

At March 31, 2024, we had no significant operating or finance leases that had not yet commenced.

At June 30, 2024, we had no significant operating or finance leases that had not yet commenced.

STOCKHOLDERS ’ EQUITY

1 unchanged sentence

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

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

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

— $ — — $ — 156,630 $ 3,834 142,020 $ 4,634

Returned for payroll taxes 39 $ 1 39 $ 1 16,354 $ 419 1,473 $ 50

Cancelled — $ — 776 $ 27 26,240 $ 841 1,826 $ 61

(1) Restricted stock granted during the three months ended March 31 2023 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 $ 32.63 and $ 24.48 , respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for restricted stock awards of $ 0.2 million and $ 0.5 million, for the three months ended March 31, 2023 and 2024, respectively.

(1) Restricted stock granted during the six months ended June 30 2024 and 2023 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 $ 24.48 and $ 32.63 , respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for restricted stock awards of $ 0.6 million and $ 0.4 million, for the three months ended June 30, 2024 and 2023, respectively, and $ 1.1 million and $ 0.6 million for the six months ended June 30, 2024 and 2023, respectively.

Stock Options

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

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

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

— $ — — $ — 370,590 $ 3,830 214,191 $ 2,506

Cancelled 193,048 $ 2,095 13,810 $ 152 487,776 $ 5,852 101,850 $ 1,334

(1) Stock options granted during the three months ended March 31, 2023 and 2024 had a weighted average price of $ 32.69 and $ 24.48 , respectively.

(1) Stock options granted during the six months ended June 30, 2024 and 2023 had a weighted average price of $ 24.48 and $ 32.69 , respectively.

The fair value of these options was calculated using the Black-Scholes option pricing model.

1 unchanged sentence

These options will vest if the employee has remained continuously employed by us through the vesting period.

The fair value of the options granted during the three months ended March 31, 2024 was estimated using the Black-Scholes option pricing model with the following assumptions:

The fair value of the options granted during the six months ended June 30, 2024 was estimated using the Black-Scholes option pricing model with the following assumptions:

Grant Date February 21, 2024

6 unchanged sentences

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

Three months ended March 31,

Shares Cash Shares Cash

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

2024 2023 2024 2023

Shares Cash Shares Cash Shares Cash Shares Cash

Exercised (1)

4 unchanged sentences

— $ — 736 $ 20 — $ — 1,465 $ 41

(1) Stock options exercised during the three months ended March 31, 2023 had a weighted average exercise price of $ 25.43 with an aggregate intrinsic value of $ 0.1 million.

(1) Stock options exercised during the three months ended June 30, 2024 and 2023 had a weighted average exercise price of $ 25.43 and $ 20.06 with an aggregate intrinsic value of $ 0.1 million and $ 0.2 million, respectively.

Stock options exercised during the six months ended June 30, 2024 and 2023 had a weighted average exercise price of $ 25.43 and $ 22.26 with an aggregate intrinsic value of $ 0.1 million and $ 0.3 million, respectively.

(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 $ 0.7 million and $ 0.2 million, for the three months ended March 31, 2023 and 2024, respectively.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for stock options of $ 0.8 million and $ 0.7 million, for the three months ended June 30, 2024 and 2023, respectively, and $ 1.0 million and $ 1.4 million for the six months ended June 30, 2024 and 2023, respectively.

Performance Awards

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

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

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

Cancelled — $ — 2,795 $ 27 80,276 $ 871 40,181 $ 1,012

For the three months ended March 31, 2023 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.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for performance awards of $ 0.5 million and $ 0.7 million, for the three months ended June 30, 2024 and 2023, respectively, and $ 0.1 million and $ 0.7 million for six months ended June 30, 2024 and 2023, respectively.

Employee Stock Purchase Plan

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

Three months ended March 31,

Shares Price Shares Price

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

2024 2023 2024 2023

Shares Price Shares Price Shares Price Shares Price

ESPP 15,270 $ 21.26 16,386 $ 24.28 31,566 $ 21.26 38,042 $ 24.28

4 unchanged sentences

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 $ 0.3 million and $ 0.2 million for the three months ended March 31, 2023 and 2024, 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 $ 0.1 million and $ 0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0.3 million and $ 0.4 million for the six months ended June 30, 2024 and 2023, respectively.

Former Employee

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

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

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

— $ — — $ — — $ — 30,000 $ 826

Returned for payroll taxes — $ — — $ — — $ — 1,001 $ 28

(1) During the three months ended March 31, 2023, we issued 30,000 shares of common stock to a former executive at a stock price of $ 27.54 , in accordance with his Separation and Release agreement pertaining to his resignation from his position as the Company’s Executive Vice President, Chief Financial Officer & Treasurer effective January 2, 2023.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for common stock awards of $ 0.8 million, for the three months ended March 31, 2023.

(1) During the six months ended June 30, 2023, we issued 30,000 shares of common stock to a former executive at a stock price of $ 27.54 , in accordance with his Separation and Release agreement pertaining to his resignation from his position as the Company’s Executive Vice President, Chief Financial Officer & Treasurer effective January 2, 2023.

We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for common stock awards of $ 0.8 million, for the six months ended June 30, 2023.

Good To Great Incentive Program

Common stock issued to certain employees under this incentive program is as follows (in thousands, except shares):

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

(1) Common stock granted during the three months ended March 31, 2023 and 2024 had a grant date stock price of $ 32.69 and $ 25.08 , respectively.

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

— $ — — $ — 31,470 $ 790 8,444 $ 276

(1) Common stock granted during the six months ended June 30, 2024 and 2023 had a grant date stock price of $ 25.08 and $ 32.69 , respectively.

Non-Employee Director and Board Advisor Compensation

On April 2, 2024, the Board of Directors (the “Board”) of the Company revised the Director Compensation Policy to provide that each independent director is entitled to a quarterly retainer of $ 37,500 payable in cash and/or unrestricted shares of our common stock at the end of each quarter.

The chair of the Board, so long as he or she is an independent director, and the chair of our Audit Committee shall be entitled to an additional annual retainer of $ 20,000 , payable in quarterly installments of $ 5,000 each at the end of each quarter, the chair of our Compensation Committee is entitled to an additional annual retainer of $ 15,000 , payable in quarterly installments of $ 3,750 at the end of each quarter, and the chair of our Corporate Governance Committee is entitled to an additional annual retainer of $ 10,000 , payable in quarterly installments of $ 2,500 at the end of each quarter.

Any new independent director will receive upon admission to the Board a grant of $ 25,000 (in addition to the independent director annual retainer prorated at the time the new director is admitted to the Board) which can be taken in cash or unrestricted shares of our common stock.

The number of shares of such common stock will be determined by dividing the cash amount by the closing price of our common stock on the date of grant, which will be the date of admission to the Board.

On May 14, 2024, the Board elected Julie Sanders to serve as chair of the Board’s Corporate Governance Committee, effective on that date, which was a result of the previous announcement of Chad Fargason, the prior chair of the Corporate Governance Committee, being elected to serve as the Company’s Non-Executive Chairman of the Board, effective March 7, 2024.

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

Three months ended March 31,

Shares Fair Value Shares Fair Value

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

2024 2023 2024 2023

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

Board of Directors (1)

2 unchanged sentences

186 $ 5 153 $ 5 370 $ 10 316 $ 10

(1) Common stock granted during the three months ended March 31, 2023 and 2024 had a weighted average price of $ 30.52 and $ 27.04 , 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 $ 0.2 million and $ 0.5 million for the three months ended March 31, 2023 and 2024, respectively.

(1) Common stock granted during the three months ended June 30, 2024 and 2023 had a weighted average price of $ 26.84 and $ 32.47 , respectively, and $ 26.93 and $ 31.01 for the six months ended June 30, 2024 and 2023, 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 $ 0.2 million for both the three months ended June 30, 2024, and 2023 and $ 0.7 million and $ 0.4 million for the six months ended June 30, 2024 and 2023, respectively.

Share Repurchase

We did not repurchase any shares during the three months ended March 31, 2023 and 2024.

At March 31, 2024, our share repurchase program had $ 48.9 million authorized for repurchases.

We did not repurchase any shares during the three and six months ended June 30, 2024 and 2023.

At June 30, 2024, our share repurchase program had $ 48.9 million authorized for repurchases.

Cash Dividends

2 unchanged sentences

$ 0.1125 $ 1,686

$ 0.1125 $ 1,704

2023 Per Share Dollar Value

$ 0.1125 $ 1,661

$ 0.1125 $ 1,679

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 March 31,

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

2024 2023 2024 2023

Numerator for basic and diluted earnings per share:

11 unchanged sentences

$ 0.40 $ 0.53 $ 0.85 $ 1.10

Stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect are as follows:

Three months ended March 31,

Stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect are as follows (in thousands):

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

2024 2023 2024 2023

Antidilutive stock options 1,433 1,236 1,456 1,183

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

At March 31, 2024, we had satisfied certain performance criteria for the first, second and third predetermined growth targets of our performance awards to be considered outstanding.

At June 30, 2024, we had satisfied certain performance criteria for the first, second and third 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.

1 unchanged sentence

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

Three months ended March 31, 2024

Three months ended June 30, 2024

Funeral Cemetery Total

4 unchanged sentences

Total $ 63,595 $ 38,723 $ 102,318

Three months ended March 31, 2023

Three months ended June 30, 2023

Funeral Cemetery Total

4 unchanged sentences

Total $ 64,505 $ 33,173 $ 97,678

Six months ended June 30, 2024

Funeral Cemetery Total

Services $ 84,396 $ 9,736 $ 94,132

Merchandise 42,323 8,623 50,946

Cemetery property — 44,146 44,146

Other revenue 8,707 7,880 16,587

Total $ 135,426 $ 70,385 $ 205,811

Six months ended June 30, 2023

Funeral Cemetery Total

Services $ 83,401 $ 9,328 $ 92,729

Merchandise 44,180 8,178 52,358

Cemetery property — 33,283 33,283

Other revenue 7,009 7,813 14,822

Total $ 134,590 $ 58,602 $ 193,192

The following table presents operating income (loss), income (loss) before income taxes and total assets (in thousands):

1 unchanged sentence

Operating income (loss):

Three months ended March 31, 2024 $ 23,074 $ 12,642 $ ( 16,239 ) $ 19,477

Three months ended March 31, 2023 22,192 8,613 ( 10,171 ) 20,634

Three months ended June 30, 2024 $ 20,759 $ 16,203 $ ( 18,593 ) $ 18,369

Three months ended June 30, 2023 17,898 13,039 ( 10,199 ) 20,738

Six months ended June 30, 2024 $ 43,833 $ 28,845 $ ( 34,832 ) $ 37,846

Six months ended June 30, 2023 40,091 21,651 ( 20,370 ) 41,372

Income (loss) before income taxes:

Three months ended March 31, 2024 $ 22,869 $ 12,709 $ ( 24,856 ) $ 10,722

Three months ended March 31, 2023 22,333 8,672 ( 18,659 ) 12,346

Three months ended June 30, 2024 $ 21,024 $ 16,303 $ ( 26,868 ) $ 10,459

Three months ended June 30, 2023 18,112 13,183 ( 19,593 ) 11,702

Six months ended June 30, 2024 $ 43,892 $ 29,013 $ ( 51,724 ) $ 21,181

Six months ended June 30, 2023 40,446 21,854 ( 38,252 ) 24,048

Total assets:

March 31, 2024 $ 790,358 $ 452,517 $ 17,644 $ 1,260,519

June 30, 2024 $ 787,166 $ 463,205 $ 18,895 $ 1,269,266

December 31, 2023 802,368 448,018 17,666 1,268,052

2 unchanged sentences

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

December 31, 2023 March 31, 2024

June 30, 2024 December 31, 2023

Prepaid and other current assets:

11 unchanged sentences

Incentive compensation $ 7,075 $ 13,156

Salaries and wages 5,226 2,285

Vacation 3,702 3,647

3 unchanged sentences

Ad valorem and franchise taxes 1,785 2,395

Salaries and wages 2,285 7,061

Perpetual care trust payable 1,358 1,529

Employee meetings and award trips 1,185 601

Commissions 1,195 1,144

Income tax payable — 4,732

Employee meetings and award trips 870 1,185

Perpetual care trust payable 361 1,358

Other accrued liabilities 1,466 1,384

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

Three months ended March 31,

Six months ended June 30,

Cash paid for interest $ 16,258 $ 17,056

Cash paid for taxes 9,200 7,329

SUBSEQUENT EVENTS

Credit Facility Amendment

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 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.

As of the effective date of the Credit Facility, as amended, and through and including the date the Company’s compliance certificate is delivered for the fiscal quarter ending June 30, 2024, interest accrues on amounts outstanding under the Credit Facility based on Pricing Level 4 set forth below, and thereafter based on the Company’s Total Leverage Ratio (as defined in the Credit Facility), in accordance with the following pricing grid:

Applicable Rate

Total Leverage Ratio

Term SOFR / Letter of Credit Fees

< 3.50:1.00 but ≥ 3.00:1.00

< 4.25:1.00 but ≥ 3.50:1.00

Immediately after giving effect to the amended Credit Facility on July 31, 2024, the Company had borrowings of approximately $ 151.0 million in principal amount outstanding and had approximately $ 96.4 million available for additional borrowing under the Credit Facility after giving effect to approximately $ 2.6 million of outstanding letters of credit.

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