CARRIAGE SERVICES INC 10-Q

Item 1. Financial Statements. CARRIAGE SERVICES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except share data) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 4,643 $ 1,165 Accounts receivable, net 32,590 30,193 Inventories 7,857 7,920 Prepaid and other current assets 4,719 4,123 Current assets held for sale 91 1,135 Total current assets 49,900 44,536 Preneed cemetery trust investments 103,817 98,120 Preneed funeral trust investments 108,290 106,219 Preneed cemetery receivables, net 50,034 50,958 Receivables from preneed funeral trusts, net 22,239 22,372 Property, plant and equipment, net 273,422 273,004 Cemetery property, net 109,283 109,576 Goodwill 410,703 414,859 Intangible and other non-current assets, net 40,744 40,427 Operating lease right-of-use assets 14,378 14,953 Cemetery perpetual care trust investments 88,624 85,103 Non-current assets held for sale 3,795 19,453 Total assets $ 1,275,229 $ 1,279,580 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt and lease obligations $ 4,192 $ 3,914 Accounts payable 14,107 15,427 Accrued and other liabilities 34,058 38,460 Current liabilities held for sale 154 240 Total current liabilities 52,511 58,041 Acquisition debt, net of current portion 4,856 4,895 Long-term liabilities held for sale 1,963 13,842 Credit facility 118,470 135,382 Senior notes 396,774 396,597 Obligations under finance leases, net of current portion 9,152 6,045 Obligations under operating leases, net of current portion 13,379 14,035 Deferred preneed cemetery revenue 60,214 61,767 Deferred preneed funeral revenue 39,152 39,261 Deferred tax liability 53,893 51,429 Other long-term liabilities 1,058 1,179 Deferred preneed cemetery receipts held in trust 103,817 98,120 Deferred preneed funeral receipts held in trust 108,290 106,219 Care trusts’ corpus 88,638 84,218 Total liabilities 1,052,167 1,071,030 Commitments and contingencies: Stockholders’ equity: Common stock, $ 0.01 par value; 80,000,000 shares authorized and 27,321,003 and 26,881,355 shares issued, respectively and 15,692,935 and 15,253,537 shares outstanding, respectively 273 269 Additional paid-in capital 237,407 243,825 Retained earnings 264,135 243,209 Treasury stock, at cost; 11,627,818 shares ( 278,753 ) ( 278,753 ) Total stockholders’ equity 223,062 208,550 Total liabilities and stockholders’ equity $ 1,275,229 $ 1,279,580 The accompanying condensed notes are an integral part of these Consolidated Financial Statements. 3 CARRIAGE SERVICES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three months ended March 31, 2025 2024 Revenue: Service revenue $ 53,010 $ 49,699 Property and merchandise revenue 45,586 45,502 Other revenue 8,473 8,292 107,069 103,493 Field costs and expenses: Cost of service 24,577 23,708 Cost of merchandise 32,609 31,950 Cemetery property amortization 1,828 1,756 Field depreciation expense 3,322 3,467 Regional and unallocated funeral and cemetery costs 5,235 3,842 Other expenses 1,656 1,508 69,227 66,231 Gross profit 37,842 37,262 Corporate costs and expenses: General, administrative and other 12,048 16,240 Net (gain) loss on divestitures, disposals and impairments charges ( 5,770 ) 1,545 Operating income 31,564 19,477 Interest expense 7,298 8,712 Other, net ( 1,988 ) 43 Income before income taxes 26,254 10,722 Expense for income taxes 8,191 3,519 (Benefit) expense related to discrete income tax items ( 2,863 ) 230 Total expense for income taxes 5,328 3,749 Net income $ 20,926 $ 6,973 Basic earnings per common share: $ 1.35 $ 0.46 Diluted earnings per common share: $ 1.34 $ 0.45 Dividends declared per common share: $ 0.1125 $ 0.1125 Weighted average number of common and common equivalent shares outstanding: Basic 15,243 14,876 Diluted 15,389 15,309 The accompanying condensed notes are an integral part of these Consolidated Financial Statements. 4 CARRIAGE SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Three months ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 20,926 $ 6,973 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,401 5,460 Provision for credit losses 1,074 782 Stock-based compensation expense 1,753 489 Deferred income tax (benefit) expense 2,464 ( 2,342 ) Amortization of intangibles 335 332 Amortization of debt issuance costs 127 176 Amortization and accretion of debt 138 132 Net (gain) loss on divestitures, disposals and impairment charges ( 5,770 ) 1,545 Gain on sale of excess real property ( 1,988 ) — Changes in operating assets and liabilities that provided (used) cash: Accounts and preneed receivables ( 2,585 ) ( 1,800 ) Inventories, prepaid and other current assets ( 537 ) 814 Intangible and other non-current assets ( 633 ) ( 834 ) Preneed funeral and cemetery trust investments ( 8,005 ) ( 15,255 ) Accounts payable ( 2,840 ) 862 Accrued and other liabilities ( 3,544 ) 4,831 Deferred preneed funeral and cemetery revenue ( 1,534 ) 2,267 Deferred preneed funeral and cemetery receipts held in trust 9,010 15,271 Net cash provided by operating activities 13,792 19,703 Cash flows from investing activities: Proceeds from divestitures and sale of other assets 18,660 10,877 Proceeds from insurance claims — 46 Capital expenditures ( 3,163 ) ( 3,551 ) Net cash provided by investing activities 15,497 7,372 Cash flows from financing activities: Borrowings from the credit facility 7,100 13,600 Payments against the credit facility ( 24,100 ) ( 38,600 ) Payments on acquisition debt and obligations under finance leases ( 148 ) ( 152 ) Proceeds from the exercise of stock options and employee stock purchase plan contributions 688 347 Taxes paid on restricted stock and performance award vestings and exercise of stock options ( 7,629 ) ( 418 ) Dividends paid on common stock ( 1,722 ) ( 1,686 ) Net cash used in financing activities ( 25,811 ) ( 26,909 ) Net increase in cash and cash equivalents 3,478 166 Cash and cash equivalents at beginning of period 1,165 1,523 Cash and cash equivalents at end of period $ 4,643 $ 1,689 The accompanying notes are an integral part of these Consolidated Financial Statements. 5 CARRIAGE SERVICES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited and in thousands) Three months ended March 31, 2025 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - December 31, 2024 15,254 $ 269 $ 243,825 $ 243,209 $ ( 278,753 ) $ 208,550 Net income — — — 20,926 — 20,926 Issuance of common stock from employee stock purchase plan 11 — 367 — — 367 Issuance of common stock to directors and board advisor 2 — 77 — — 77 Issuance of common stock 271 3 ( 3 ) — — — Issuance of restricted common stock 115 1 ( 1 ) — — — Exercise of stock options 77 — 321 — — 321 Restricted common stock, performance awards and stock options surrendered for taxes paid ( 49 ) — ( 7,629 ) — — ( 7,629 ) Stock-based compensation expense — — 1,676 — — 1,676 Dividends on common stock — — ( 1,722 ) — — ( 1,722 ) Other 12 — 496 — — 496 Balance - March 31, 2025 15,693 $ 273 $ 237,407 $ 264,135 $ ( 278,753 ) $ 223,062 Three months ended March 31, 2024 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - December 31, 2023 15,000 $ 266 $ 241,291 $ 210,256 $ ( 278,753 ) $ 173,060 Net income — — — 6,973 — 6,973 Issuance of common stock from employee stock purchase plan 16 — 347 — — 347 Issuance of common stock to directors and board advisor 4 — 113 — — 113 Issuance of restricted common stock 157 2 ( 2 ) — — — Restricted common stock and stock options surrendered for taxes paid ( 43 ) — ( 418 ) — — ( 418 ) Stock-based compensation expense — — 376 — — 376 Dividends on common stock — — ( 1,686 ) — — ( 1,686 ) Other 31 — 790 — — 790 Balance - March 31, 2024 15,165 $ 268 $ 240,811 $ 217,229 $ ( 278,753 ) $ 179,555 The accompanying condensed notes are an integral part of these Consolidated Financial Statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Carriage Services, Inc. (“Carriage,” the “Company,” “we,” “us,” or “our”) is a leading provider of funeral and cemetery services and merchandise in the United States. Our operations are reported in two business segments: Funeral Home Operations, which currently accounts for approximately 70 % of our total revenue and Cemetery Operations, which currently accounts for approximately 30 % of our total revenue. At March 31, 2025, we operated 160 funeral homes in 25 states and 28 cemeteries in 10 states. Our funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns. Funeral services include consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. We provide funeral services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis. Our cemetery operations generate revenue primarily through sales of cemetery interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise). We provide cemetery services and products on both an atneed and preneed basis. Principles of Consolidation and Interim Condensed Disclosures Our unaudited Consolidated Financial Statements include the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Our interim Consolidated Financial Statements are unaudited, but include all adjustments, which consist of normal, recurring accruals, that are necessary for a fair presentation of our financial position and results of operations as of and for the interim periods presented. There have been no material changes in our accounting policies previously disclosed in Part II, Item 8 “Financial Statements and Supplementary Data” in Note 1 in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition, our unaudited Consolidated Financial Statements have been prepared in a manner consistent with the accounting principles described in our Annual Report on Form 10-K for the year ended December 31, 2024 unless otherwise disclosed herein, and should be read in conjunction therewith. Use of Estimates The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, we evaluate our critical estimates and judgments, which include those related to the impairment of goodwill and the fair value measurements used in business combinations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates and assumptions about complex and inherently uncertain matters and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. Historical performance should not be viewed as indicative of future performance because there can be no assurance the margins, operating income and net earnings, as a percentage of revenue, will be consistent from period to period. Cash and Cash Equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Inventory Inventory consists primarily of caskets, outer burial containers and cemetery monuments and markers and is recorded at the lower of its cost basis or net realizable value. Inventory is relieved using specific identification in fulfillment of performance obligations on our contracts. Held for Sale At March 31, 2025, the assets and liabilities of non-core funeral home and cemetery businesses expected to be sold within the next twelve months, which have met the criteria for such classification, have been classified as held for sale. 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The table below presents the carrying amounts of the assets and liabilities included as part of the expected sale (in thousands): March 31, 2025 December 31, 2024 Accounts receivable, net $ 36 $ 833 Inventories 52 302 Prepaid and other current assets 3 — Current assets held for sale $ 91 $ 1,135 Preneed cemetery trust investments $ 1,059 $ 4,876 Preneed funeral trust investments 405 2,197 Preneed cemetery receivables, net 3 1,671 Receivables from funeral preneed trusts, net 27 — Property, plant and equipment, net 1,554 4,898 Cemetery property, net 128 3,362 Intangible and other non-current assets, net 223 215 Operating lease right-of-use assets 74 — Cemetery perpetual care trust investments 322 2,234 Non-current assets held for sale $ 3,795 $ 19,453 Current portion of operating lease obligations $ 22 $ — Accounts payable 18 94 Accrued and other liabilities 114 146 Current liabilities held for sale $ 154 $ 240 Obligations under operating leases, net of current portion $ 53 $ — Deferred preneed cemetery revenue 97 3,517 Deferred preneed funeral revenue 27 1,018 Deferred preneed cemetery receipts held in trust 1,059 4,876 Deferred preneed funeral receipts held in trust 405 2,197 Care trusts’ corpus 322 2,234 Long-term liabilities held for sale $ 1,963 $ 13,842 Property, Plant and Equipment Property, plant and equipment is comprised of the following (in thousands): March 31, 2025 December 31, 2024 Land $ 85,462 $ 86,609 Buildings and improvements 264,733 265,231 Furniture, equipment and vehicles 70,863 72,052 Property, plant and equipment, at cost 421,058 423,892 Less: accumulated depreciation ( 146,082 ) ( 145,990 ) Property, plant and equipment, net $ 274,976 $ 277,902 Less: Held for sale ( 1,554 ) ( 4,898 ) Property, plant and equipment, net $ 273,422 $ 273,004 During the three months ended March 31, 2025, we sold two funeral homes and three cemeteries that had a carrying value of property, plant and equipment of $ 3.4 million, which was included in the gain on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, more fully described in Note 4 to the Consolidated Financial Statements. Additionally, during the three months ended March 31, 2025, we sold real property for $ 2.9 million, with a carrying value of $ 0.9 million, resulting in a $ 2.0 million gain on the sale, which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. 8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) During the three months ended March 31, 2024, we sold six funeral homes and one cemetery that had a carrying value of property, plant and equipment of $ 3.1 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. Our growth and maintenance capital expenditures totaled $ 1.6 million for both the three months ended March 31, 2025 and 2024. In addition, we recorded depreciation expense of $ 3.5 million and $ 3.6 million for the three months ended March 31, 2025 and 2024, respectively. Cemetery Property Cemetery property was $ 109.4 million and $ 112.9 million, net of accumulated amortization of $ 71.4 million and $ 72.6 million at March 31, 2025 and December 31, 2024, respectively. When cemetery property is sold, the value of the cemetery property (interment right costs) is expensed as amortization using the specific identification method in the period in which the sale of the interment right is recognized as revenue. Our growth capital expenditures for cemetery property development totaled $ 1.6 million and $ 2.0 million for the three months ended March 31, 2025 and 2024, respectively. We recorded amortization expense for cemetery interment rights of $ 1.8 million for both the three months ended March 31, 2025 and 2024. During the three months ended March 31, 2025, we sold three cemeteries that had a carrying value of cemetery property of $ 3.3 million, which was included in the gain on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, more fully described in Note 4 to the Consolidated Financial Statements. During the three months ended March 31, 2024, we sold one cemetery that had a carrying value of cemetery property of $ 0.8 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. Income Taxes Income tax expense was $ 5.3 million and $ 3.7 million for the three months ended March 31, 2025 and 2024, respectively. Our operating tax rate before discrete items was 31.2 % and 32.8 % for the three months ended March 31, 2025 and 2024, respectively. Subsequent Events We have evaluated events and transactions during the period subsequent to March 31, 2025 through the date the financial statements were issued for potential recognition or disclosure in the accompanying consolidated financial statements covered by this report. 2. RECENTLY ISSUED ACCOUNTING STANDARDS Income Taxes In December 2023, the FASB issued ASU, Income Taxes - Improvements to Income Tax Disclosures to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information. The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation; and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The amendments in this update also require that all entities disclose on an annual basis (1) the amount of net income taxes paid disaggregated by federal and state taxes; and (2) the amount of net income taxes paid disaggregated by individual jurisdictions in which net income taxes paid is equal to or greater than five percent of total net income taxes paid. The amendments are effective for annual periods beginning after December 15, 2024 and therefore were effective for us for our fiscal year beginning January 1, 2025 and for interim periods within our fiscal year beginning January 1, 2026. The adoption had no material impact on our consolidated financial statements as it modified disclosure requirements only. Accounting Pronouncements Not Yet Adopted Expense Disaggregation In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures . Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The amendments in this update require, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We expect the adoption will have no material impact on our consolidated financial statements as it modifies disclosure requirements only. 3. GOODWILL The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands): March 31, 2025 December 31, 2024 Goodwill at the beginning of the period $ 414,859 $ 423,643 Decrease in goodwill related to divestitures ( 4,156 ) ( 8,784 ) Goodwill at the end of the period $ 410,703 $ 414,859 During the three months ended March 31, 2025, we allocated $ 4.2 million of goodwill to the sale of two funeral homes and three cemeteries which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, of which $ 2.6 million was allocated to our funeral home segment and $ 1.6 million was allocated to our cemetery segment. During the three months ended March 31, 2024, we allocated $ 8.7 million of goodwill to the sale of six funeral homes and one cemetery which was recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations, of which $ 7.8 million was allocated to our funeral homes segment and $ 1.0 million was allocated to our cemetery segment. 4. DIVESTED OPERATIONS During the three months ended March 31, 2025, we sold two funeral homes and three cemeteries for an aggregate of $ 15.8 million. During the three months ended March 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $ 10.9 million. The operating results of these divested funeral homes and cemeteries are reflected on our Consolidated Statements of Operations as shown in the table below (in thousands): Three months ended, March 31, 2025 2024 Revenue $ 1,653 $ 1,151 Operating income 476 122 Net gain (loss) on divestitures (1) 5,937 ( 1,501 ) Income tax (expense) benefit ( 2,001 ) 452 Net gain (loss) from divested operations, after tax $ 4,412 $ ( 927 ) (1) Net loss on divestitures is recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. 5. RECEIVABLES Accounts Receivable Our funeral receivables are recorded in Accounts receivable, net and primarily consist of amounts due for funeral services already performed. Atneed cemetery receivables and preneed cemetery receivables with payments expected to be received within one year from the balance sheet date are also recorded in Accounts receivable, net . Preneed cemetery receivables with payments expected to be received beyond one year from the balance sheet date are recorded in Preneed cemetery receivables, net . 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Accounts receivable is comprised of the following (in thousands): March 31, 2025 Column1 Funeral Cemetery Corporate Held for Sale Total Trade and financed receivables $ 8,104 $ 23,963 $ — $ ( 36 ) $ 32,031 Other receivables 585 343 1,080 — 2,008 Allowance for credit losses ( 303 ) ( 1,146 ) — — ( 1,449 ) Accounts receivable, net $ 8,386 $ 23,160 $ 1,080 $ ( 36 ) $ 32,590 December 31, 2024 Column1 Funeral Cemetery Corporate Held for Sale Total Trade and financed receivables $ 7,085 $ 24,355 $ — $ ( 833 ) $ 30,607 Other receivables 557 345 — — 902 Allowance for credit losses ( 302 ) ( 1,014 ) — — ( 1,316 ) Accounts receivable, net $ 7,340 $ 23,686 $ — $ ( 833 ) $ 30,193 Other receivables include supplier rebates, commissions due from third-party insurance companies and perpetual care income receivables. We do not provide an allowance for credit losses for these receivables as we have historically not had any collectability issues nor do we expect any in the foreseeable future. The following table summarizes the activity in our allowance for credit losses by portfolio segment for the three months ended March 31, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs Recoveries March 31, 2025 Trade and financed receivables: Funeral $ ( 302 ) $ ( 251 ) $ 412 $ ( 162 ) $ ( 303 ) Cemetery ( 1,014 ) ( 332 ) 200 — ( 1,146 ) Total allowance for credit losses on trade and financed receivables $ ( 1,316 ) $ ( 583 ) $ 612 $ ( 162 ) $ ( 1,449 ) Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheets of $ 9.7 million and $ 10.2 million at March 31, 2025 and December 31, 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of ten years for preneed funeral contracts. Cemetery Receivables Our cemetery receivables are comprised of the following (in thousands): March 31, 2025 December 31, 2024 Interment rights $ 79,440 $ 79,436 Merchandise and services 12,480 13,128 Unearned finance charges 5,001 4,983 Cemetery receivables $ 96,921 $ 97,547 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The components of our cemetery receivables are as follows (in thousands): March 31, 2025 December 31, 2024 Cemetery receivables $ 96,921 $ 97,547 Less: unearned finance charges ( 5,001 ) ( 4,983 ) Cemetery receivables, at amortized cost $ 91,920 $ 92,564 Less: allowance for contract cancellation and credit losses ( 3,447 ) ( 3,018 ) Less: balances due on undelivered cemetery preneed contracts ( 15,619 ) ( 13,576 ) Less: amounts in accounts receivable ( 22,817 ) ( 23,341 ) Preneed cemetery receivables, net including HFS $ 50,037 $ 52,629 Less: Held for sale ( 3 ) ( 1,671 ) Preneed cemetery receivables, net $ 50,034 $ 50,958 The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the three months ended March 31, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs March 31, 2025 Total allowance for credit losses on Preneed cemetery receivables, net $ ( 2,004 ) $ ( 491 ) $ 194 $ ( 2,301 ) The amortized cost basis of our cemetery receivables by year of origination as of March 31, 2025 is as follows (in thousands): 2025 2024 2023 2022 2021 Prior Total Total cemetery receivables, at amortized cost $ 11,923 $ 43,549 $ 19,397 $ 10,910 $ 4,283 $ 1,858 $ 91,920 The aging of past due cemetery receivables as of March 31, 2025 is as follows (in thousands): 31-60 Past Due 61-90 Past Due 91-120 Past Due >120 Past Due Total Past Due Current Total Recognized revenue $ 1,336 $ 1,334 $ 439 $ 3,018 $ 6,127 $ 70,174 $ 76,301 Deferred revenue 440 154 82 771 1,447 19,173 20,620 Total contracts $ 1,776 $ 1,488 $ 521 $ 3,789 $ 7,574 $ 89,347 $ 96,921 Balances due on undelivered preneed cemetery contracts have been reclassified to reduce Deferred preneed cemetery revenue on our Consolidated Balance Sheets. The transaction price allocated to preneed merchandise and service performance obligations that were unfulfilled were $ 15.6 million and $ 13.6 million at March 31, 2025 and December 31, 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of eight years for preneed cemetery contracts. 6. FAIR VALUE MEASUREMENTS We evaluated our financial assets and liabilities for those that met the criteria of the disclosure requirements and fair value framework. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate the fair values of those instruments due to the short-term nature of the instruments. The fair values of our receivables on preneed cemetery contracts are impracticable to estimate because of the lack of a trading market and the diverse number of individual contracts with varying terms. Our acquisition debt and Credit Facility (as defined in Note 10) and Senior Notes (as defined in Note 11) are classified within Level 2 of the Fair Value Measurements hierarchy. At March 31, 2025, the carrying value and fair value of our Credit Facility was $ 120.0 million. We believe that our Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and therefore, the carrying value of our Credit Facility approximates fair value. We estimate the fair value of our acquisition debt utilizing an income approach, which uses a present value calculation to discount payments based on current market rates as of the reporting date. At March 31, 2025, the carrying value of our acquisition debt was $ 5.4 million, which approximated its fair value. The fair value of our Senior Notes was $ 364.4 million at March 31, 2025, based on the last traded or broker quoted price. We identified investments in fixed income securities, common stock and mutual funds presented within the preneed and perpetual care trust investments categories on our Consolidated Balance Sheets as having met the criteria for fair value measurement. Where quoted prices are available in an active market, investments held by the trusts are classified as Level 1 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) investments pursuant to the three-level valuation hierarchy. Our Level 1 investments include cash, common stock and equity mutual funds. Where quoted market prices are not available for the specific security, then fair values are estimated by using quoted prices of similar securities in active markets or inputs other than quoted prices that can corroborate observable market data. These investments are fixed income securities, including U.S. agency obligations, foreign debt, corporate debt, preferred stocks, certificates of deposit and fixed income mutual funds and other investments, all of which are classified within Level 2 of the valuation hierarchy. In addition, we have an investment in a limited partnership fund, whose fair value has been estimated using the net asset value per share (“NAV”) practical expedient described in ASC 820-10-35-59, Fair Value Measurement of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) and therefore, has not been classified in the fair value hierarchy. The investment strategy of this fund is to generate attractive, risk-adjusted returns over a multi-year performance period through the construction of a concentrated portfolio of investments possessing certain distinct business attributes that suggest the potential for long-term value creation. The value of the investments in this fund cannot be liquidated at March 31, 2025 because the investments include restrictions that do not allow for liquidation until 2027. As of March 31, 2025, we do not have an unfunded commitment for this investment. Furthermore, we have two investments in real estate debt and structured credit (“alternative investments”), whose fair value has been estimated using NAV and therefore, has not been classified in the fair value hierarchy. The investment strategy for these alternative investments is to create capital growth, income generation, and risk-adjusted returns. Capital growth is achieved by identifying high-potential investments that are appreciated over time. Income generation may involve dividends, rental income, or interest from various investments. Risk-adjusted returns focus on balancing potential profits with acceptable levels of risk, often through diversification and careful asset allocation. The real estate debt is approximately 39% of the total alternative investment and can be liquidated with a 40-day notice period and cannot exceed 5% of the total fund’s value. The structured credit is approximately 61% of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions. As of March 31, 2025, we do not have an unfunded commitment for these investments. Our receivables from preneed funeral trusts represent assets in trusts which are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets. We account for these investments at cost. See Notes 7 and 8 to our Consolidated Financial Statements for the fair value hierarchy levels of our trust investments. 7. TRUST INVESTMENTS Preneed trust investments represent trust fund assets that we are generally permitted to withdraw as the services and merchandise are provided to customers. Preneed funeral and cemetery contracts are secured by payments from customers, less amounts not required by law to be deposited into trust. These earnings are recognized in Other revenue on our Consolidated Statements of Operations, when a service is performed or merchandise is delivered. Trust management fees charged by our wholly owned registered investment advisory firm (“CSV RIA”) are included as revenue in the period in which they are earned. Our investments are diversified across multiple industry segments using a balanced allocation strategy to minimize long-term risk. We do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery. Cemetery perpetual care trust investments represent a portion of the proceeds from the sale of cemetery property interment rights that we are required by various state laws to deposit into perpetual care trust funds. The income earned from these perpetual care trusts offsets maintenance expenses for cemetery property and memorials. This trust fund income is recognized in Other revenue. Changes in the fair value of our trust fund assets ( Preneed funeral, cemetery and perpetual care trust investments ) are offset by changes in the fair value of our trust fund liabilities ( Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus ) and reflected in Other, net . There is no impact on earnings until such time the services are performed, or the merchandise is delivered, causing the contract to be withdrawn from the trust in accordance with state regulations and the gain or loss is allocated to the contract. We rely on our trust investments to provide funding for the various contractual obligations that arise upon maturity of the underlying preneed contracts. Because of the long-term relationship between the establishment of trust investments and the required performance of the underlying contractual obligations, the impact of current market conditions that may exist at any given time is not necessarily indicative of our ability to generate profit on our future performance obligations. 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Preneed Cemetery Trust Investments The components of Preneed cemetery trust investments on our Consolidated Balance Sheets are as follows (in thousands): March 31, 2025 December 31, 2024 Preneed cemetery trust investments, at market value $ 108,073 $ 106,143 Less: allowance for contract cancellation ( 3,197 ) ( 3,147 ) Preneed cemetery trust investments $ 104,876 $ 102,996 Less: Held for sale ( 1,059 ) ( 4,876 ) Preneed cemetery trust investments $ 103,817 $ 98,120 The cost and market values associated with preneed cemetery trust investments at March 31, 2025 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 26,369 $ — $ — $ 26,369 Fixed income securities: U.S. agency obligations 2 526 — ( 35 ) 491 Foreign debt 2 5,296 710 ( 8 ) 5,998 Corporate debt 2 4,278 140 ( 140 ) 4,278 Preferred stock 2 359 1 ( 108 ) 252 Certificates of deposit 2 79 — ( 5 ) 74 Common stock 1 27,322 5,252 ( 3,147 ) 29,427 Limited partnership fund 3,506 — ( 222 ) 3,284 Mutual funds: Equity 1 533 43 ( 11 ) 565 Fixed income 2 24,979 75 ( 1,690 ) 23,364 Alternative investments 13,324 — — 13,324 Trust securities $ 106,571 $ 6,221 $ ( 5,366 ) $ 107,426 Accrued investment income $ 647 $ 647 Preneed cemetery trust investments $ 108,073 Market value as a percentage of cost 100.8 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ — Due in one to five years 2,895 Due in five to ten years 209 Thereafter 7,989 Total fixed income securities $ 11,093 14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The cost and market values associated with preneed cemetery trust investments at December 31, 2024 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 23,215 $ — $ — $ 23,215 Fixed income securities: U.S. agency obligations 2 664 1 ( 46 ) $ 619 Foreign debt 2 8,575 1,431 ( 8 ) 9,998 Corporate debt 2 8,500 365 ( 256 ) 8,609 Preferred stock 2 2,833 479 ( 176 ) 3,136 Certificates of deposit 2 79 — ( 5 ) 74 Common stock 1 29,325 4,322 ( 3,381 ) 30,266 Limited partnership fund 3,530 84 — 3,614 Mutual funds: Equity 1 911 85 — 996 Fixed income 2 27,268 94 ( 2,376 ) 24,986 Trust securities $ 104,900 $ 6,861 $ ( 6,248 ) $ 105,513 Accrued investment income $ 630 $ 630 Preneed cemetery trust investments $ 106,143 Market value as a percentage of cost 100.6 % The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): March 31, 2025 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: U.S. agency obligations $ — $ — $ 491 $ ( 35 ) $ 491 $ ( 35 ) Foreign debt — — 210 ( 8 ) 210 ( 8 ) Corporate debt 266 ( 10 ) 79 ( 130 ) 345 ( 140 ) Preferred stock 13 — 194 ( 108 ) 207 ( 108 ) Certificates of deposit — — 74 ( 5 ) 74 ( 5 ) Total fixed income securities with an unrealized loss $ 279 $ ( 10 ) $ 1,048 $ ( 286 ) $ 1,327 $ ( 296 ) 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): December 31, 2024 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: U.S. agency obligations $ — $ — $ 479 $ ( 46 ) $ 479 $ ( 46 ) Foreign debt — — 211 ( 8 ) 211 ( 8 ) Corporate debt 1,274 ( 139 ) 94 ( 117 ) 1,368 ( 256 ) Preferred stock 889 ( 5 ) 891 ( 171 ) 1,780 ( 176 ) Certificates of deposit — — 74 ( 5 ) 74 ( 5 ) Total fixed income securities with an unrealized loss $ 2,163 $ ( 144 ) $ 1,749 $ ( 347 ) $ 3,912 $ ( 491 ) Preneed cemetery trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands): Three months ended March 31, 2025 2024 Investment income $ 647 $ 539 Realized gains 2,003 10,576 Realized losses ( 1,603 ) ( 3,764 ) Unrealized gains (losses), net 855 ( 6,959 ) Expenses and taxes ( 224 ) ( 634 ) Net change in deferred preneed cemetery receipts held in trust ( 1,678 ) 242 $ — $ — Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands): Three months ended March 31, 2025 2024 Purchases $ ( 3,506 ) $ ( 4,326 ) Sales 18,069 16,560 Preneed Funeral Trust Investments Preneed funeral trust investments represent trust fund assets that we are permitted to withdraw as services and merchandise are provided to customers. Preneed funeral contracts are secured by payments from customers, less retained amounts not required to be deposited into trust. The components of Preneed funeral trust investments on our Consolidated Balance Sheets are as follows (in thousands): March 31, 2025 December 31, 2024 Preneed funeral trust investments, at market value $ 111,997 $ 111,721 Less: allowance for contract cancellation ( 3,302 ) ( 3,305 ) Preneed funeral trust investments $ 108,695 $ 108,416 Less: Held for sale ( 405 ) ( 2,197 ) Preneed funeral trust investments $ 108,290 $ 106,219 16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The cost and market values associated with preneed funeral trust investments at March 31, 2025 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 35,199 $ — $ — $ 35,199 Fixed income securities: U.S agency obligations 2 304 — ( 24 ) 280 Foreign debt 2 5,045 682 ( 7 ) 5,720 Corporate debt 2 3,888 134 ( 9 ) 4,013 Common stock 1 24,394 4,833 ( 2,630 ) 26,597 Limited partnership fund 3,372 — ( 213 ) 3,159 Mutual funds: Equity 1 400 14 ( 11 ) 403 Fixed income 2 22,794 37 ( 1,493 ) 21,338 Other investments 2 1,884 — — 1,884 Alternative investments 12,814 — — 12,814 Trust securities $ 110,094 $ 5,700 $ ( 4,387 ) $ 111,407 Accrued investment income $ 590 $ 590 Preneed cemetery trust investments $ 111,997 Market value as a percentage of cost 101.2 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ — Due in one to five years 2,482 Due in five to ten years 96 Thereafter 7,435 Total fixed income securities $ 10,013 17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The cost and market values associated with preneed funeral trust investments at December 31, 2024 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 33,735 $ — $ — $ 33,735 Fixed income securities: U.S agency obligations 2 387 — ( 30 ) 357 Foreign debt 2 8,193 1,373 ( 7 ) 9,559 Corporate debt 2 7,941 351 ( 134 ) 8,158 Preferred stock 2 2,577 460 ( 218 ) 2,819 Common stock 1 26,293 3,989 ( 2,876 ) 27,406 Limited partnership fund 3,392 80 — 3,472 Mutual funds: Equity 1 763 41 — 804 Fixed income 2 24,952 83 ( 2,118 ) 22,917 Other investments 2 1,910 — — 1,910 Trust securities $ 110,143 $ 6,377 $ ( 5,383 ) $ 111,137 Accrued investment income $ 584 $ 584 Preneed cemetery trust investments $ 111,721 Market value as a percentage of cost 100.9 % The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): March 31, 2025 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: U.S agency obligations $ — $ — $ 280 $ ( 24 ) $ 280 $ ( 24 ) Foreign debt — — 202 ( 7 ) 202 ( 7 ) Corporate debt 256 ( 9 ) — — 256 ( 9 ) Total fixed income securities with an unrealized loss $ 256 $ ( 9 ) $ 482 $ ( 31 ) $ 738 $ ( 40 ) 18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): December 31, 2024 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: U.S agency obligations $ — $ — $ 274 $ ( 30 ) $ 274 $ ( 30 ) Foreign debt — — 203 ( 7 ) 203 ( 7 ) Corporate debt 1,225 ( 133 ) — ( 1 ) 1,225 ( 134 ) Preferred stock 842 ( 4 ) 717 ( 214 ) 1,559 ( 218 ) Total fixed income securities with an unrealized loss $ 2,067 $ ( 137 ) $ 1,194 $ ( 252 ) $ 3,261 $ ( 389 ) Preneed funeral trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands): Three months ended March 31, 2025 2024 Investment income $ 473 $ 436 Realized gains 1,927 9,780 Realized losses ( 1,709 ) ( 3,209 ) Unrealized gains (losses), net 1,313 ( 5,848 ) Expenses and taxes ( 105 ) ( 371 ) Net change in deferred preneed funeral receipts held in trust ( 1,899 ) ( 788 ) $ — $ — Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands): Three months ended March 31, 2025 2024 Purchases $ ( 3,372 ) $ ( 4,003 ) Sales 17,359 15,118 Cemetery Perpetual Care Trust Investments Care trusts’ corpus on our Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus are as follows (in thousands): March 31, 2025 December 31, 2024 Cemetery perpetual care trust investments, at market value $ 88,946 $ 87,337 Obligations due to (due from) trust 14 ( 885 ) Care trusts’ corpus, including HFS $ 88,960 $ 86,452 Less: Held for sale ( 322 ) ( 2,234 ) Care trusts' corpus $ 88,638 $ 84,218 19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at March 31, 2025 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 15,220 $ — $ — $ 15,220 Fixed income securities: Foreign debt 2 5,005 647 ( 7 ) 5,645 Corporate debt 2 4,334 165 ( 322 ) 4,177 Preferred stock 2 567 — ( 71 ) 496 Common stock 1 24,278 4,772 ( 2,859 ) 26,191 Limited partnership fund 3,122 — ( 198 ) 2,924 Mutual funds: Equity 1 467 33 ( 10 ) 490 Fixed income 2 22,784 102 ( 1,564 ) 21,322 Alternative investments 11,862 — — 11,862 Trust securities $ 87,639 $ 5,719 $ ( 5,031 ) $ 88,327 Accrued investment income $ 619 $ 619 Preneed cemetery trust investments $ 88,946 Market value as a percentage of cost 100.8 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ — Due in one to five years 2,410 Due in five to ten years 289 Thereafter 7,619 Total fixed income securities $ 10,318 The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2024 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 14,054 $ — $ — $ 14,054 Fixed income securities: Foreign debt 2 7,770 1,262 ( 7 ) 9,025 Corporate debt 2 7,942 357 ( 402 ) 7,897 Preferred stock 2 2,725 418 ( 148 ) 2,995 Common stock 1 25,563 3,866 ( 3,036 ) 26,393 Limited partnership fund 3,078 73 — 3,151 Mutual funds: Equity 1 789 68 — 857 Fixed income 2 24,374 111 ( 2,115 ) 22,370 Trust securities $ 86,295 $ 6,155 $ ( 5,708 ) $ 86,742 Accrued investment income $ 595 $ 595 Preneed cemetery trust investments $ 87,337 Market value as a percentage of cost 100.5 % 20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at March 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): March 31, 2025 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: Foreign debt $ — $ — $ 187 $ ( 7 ) $ 187 $ ( 7 ) Corporate debt 237 ( 8 ) 282 ( 314 ) 519 ( 322 ) Preferred stock — — 496 ( 71 ) 496 ( 71 ) Total fixed income securities with an unrealized loss $ 237 $ ( 8 ) $ 965 $ ( 392 ) $ 1,202 $ ( 400 ) The following table summarizes our fixed income securities within our perpetual care trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): December 31, 2024 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: Foreign debt $ — $ — $ 184 $ ( 7 ) $ 184 $ ( 7 ) Corporate debt 1,111 ( 121 ) 316 ( 281 ) 1,427 ( 402 ) Preferred stock 764 ( 4 ) 1,086 ( 144 ) 1,850 ( 148 ) Total fixed income securities with an unrealized loss $ 1,875 $ ( 125 ) $ 1,586 $ ( 432 ) $ 3,461 $ ( 557 ) Perpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands): Three months ended March 31, 2025 2024 Realized gains $ 251 $ 1,306 Realized losses ( 201 ) ( 426 ) Unrealized gains (losses), net 688 ( 6,069 ) Net change in care trusts’ corpus ( 738 ) 5,189 $ — $ — Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands): Three months ended March 31, 2025 2024 Investment income $ 2,487 $ 3,129 Realized losses ( 672 ) ( 374 ) Total $ 1,815 $ 2,755 Purchases and sales of investments in the perpetual care trusts are as follows (in thousands): Three months ended March 31, 2025 2024 Purchases $ ( 3,122 ) $ ( 3,649 ) Sales 15,963 14,661 21 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. RECEIVABLES FROM PRENEED FUNERAL TRUSTS Our receivables from preneed funeral trusts represent assets in trusts which are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets. We account for these investments at cost. Receivables from preneed funeral trusts are as follows (in thousands): March 31, 2025 December 31, 2024 Preneed funeral trust funds, at cost $ 22,955 $ 23,063 Less: allowance for contract cancellation ( 689 ) ( 691 ) Receivables from preneed funeral trusts, net including HFS $ 22,266 $ 22,372 Less: Held for sale ( 27 ) — Receivables from preneed funeral trusts, net $ 22,239 $ 22,372 The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations related to the underlying preneed funeral contracts at March 31, 2025 and December 31, 2024. The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes unrealized gains and losses on trust assets. The composition of the preneed trust funds at March 31, 2025 is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 6,860 $ 6,860 Fixed income investments 12,803 12,803 Mutual funds and common stocks 3,288 3,090 Annuities 4 4 Total $ 22,955 $ 22,757 The composition of the preneed trust funds at December 31, 2024 is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 6,826 $ 6,826 Fixed income investments 12,998 12,998 Mutual funds and common stocks 3,235 2,999 Annuities 4 4 Total $ 23,063 $ 22,827 9. INTANGIBLE AND OTHER NON-CURRENT ASSETS Intangible and other non-current assets are as follows (in thousands): March 31, 2025 December 31, 2024 Trade names $ 28,116 $ 28,116 Internally developed software, net of accumulated amortization of $ 831 and $ 764 , respectively 6,307 5,601 Capitalized commissions on preneed contracts, net of accumulated amortization of $ 4,616 and $ 4,653 , respectively 4,773 4,991 Prepaid agreements not-to-compete, net of accumulated amortization of $ 3,654 and $ 3,543 , respectively 814 923 Non-current prepaid and other intangibles, net of accumulated amortization of $ 142 and $ 109 , respectively 908 1,011 Other 49 — Intangible and other non-current assets, net including HFS $ 40,967 $ 40,642 Less: Held for sale ( 223 ) ( 215 ) Intangible and other non-current assets, net $ 40,744 $ 40,427 22 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Trade Names Our trade names have indefinite lives and therefore are not amortized. During the three months ended March 31, 2024, two of the funeral homes that we sold had a carrying value of tradenames of $ 0.2 million, which was included in the loss on sale and recorded in Net (gain) loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. Internally Developed Software Internally developed software is amortized on a straight-line basis typically over three to five years . Amortization expense was $ 0.1 million for both the three months ended March 31, 2025 and 2024. Capitalized Commissions We capitalize sales commissions and other direct selling costs related to preneed cemetery merchandise and services and preneed funeral trust contracts as these costs are incremental and recoverable costs of obtaining a contract with a customer. Our capitalized commissions on preneed contracts are amortized on a straight-line basis over the average maturity period of ten years for our preneed funeral trust contracts and eight years for our preneed cemetery merchandise and services contracts. Amortization expense was $ 0.2 million for both the three months ended March 31, 2025 and 2024. Prepaid Agreements Not-to-Compete Prepaid agreements not-to-compete are amortized over the term of the respective agreements, generally ranging from one to ten years . Amortization expense was $ 0.1 million for both the three months ended March 31, 2025 and 2024. Non-current Prepaid and Other Intangibles Non-current prepaid agreements are related to software licenses that have been prepaid for multiple years. These agreements are amortized on a straight-line basis over the term of the respective agreements, generally ranging from two to three years . Other intangible assets relate to intellectual property and are amortized on a straight-line basis, typically over three years . Amortization expense was immaterial for both the three months ended March 31, 2025 and 2024. The aggregate amortization expense for our capitalized commissions, prepaid not-to-compete agreements, internal-use software and non-current prepaid and other agreements as of March 31, 2025 is as follows (in thousands): Capitalized Commissions Prepaid Agreements Not-to-compete Internally Developed Software Non-current Prepaid and Other Intangibles Years ending December 31, Remainder of 2025 $ 834 $ 281 $ 1,032 $ 381 2026 790 262 1,363 467 2027 739 142 1,362 60 2028 668 78 1,164 — 2029 572 38 1,109 — Thereafter 1,170 13 277 — Total amortization expense $ 4,773 $ 814 $ 6,307 $ 908 10. CREDIT FACILITY AND ACQUISITION DEBT At March 31, 2025, our senior secured revolving credit facility (as amended, the “Credit Facility”) was comprised of: (i) a $ 250.0 million revolving credit facility, including a $ 15.0 million subfacility for letters of credit and a $ 10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $ 75.0 million in the aggregate in the form of increased revolving commitments or incremental term loans. Our obligations under the Credit Facility are unconditionally guaranteed on a joint and several basis by the same subsidiaries which guarantee the Senior Notes (as defined in Note 11) and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”). On July 31, 2024, the Company entered into a fourth amendment, (the “Credit Facility Amendment”), to our Credit Facility, with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent. The Credit Facility Amendment provided, among other things, for (i) the extension of the maturity date of the Credit Facility to July 31, 2029, provided that, if the Senior Notes (as defined in the Credit Facility) have a stated maturity date that is prior to July 31, 2029, then the maturity date shall instead be the date that is 91 days prior to the stated maturity date of the Senior Notes; (ii) the 23 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) establishment of Term Secured Overnight Financing Rate (“SOFR”) as a benchmark rate and the removal of BSBY from the Credit Facility, including conforming revisions to certain defined terms under the Credit Facility; (iii) the conversion of each existing BSBY Rate Loan (as defined in the Credit Facility prior to giving effect to the Credit Facility Amendment) to a Term SOFR Loan (as defined in the Credit Facility); (iv) modifications to the definitions of “Applicable Rate” and “Applicable Fee Rate” to change the applicable rates and pricing levels set forth in each pricing grid; (v) the removal of certain mandatory prepayments arising from the issuance of either Equity Interests or Debt (as both are defined by the Credit Facility); and (vi) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein. The Credit Facility contains customary affirmative covenants, including, but not limited to, covenants with respect to the use of proceeds, payment of taxes and other obligations, continuation of the Company’s business and the maintenance of existing rights and privileges, the maintenance of property and insurance, among others. In addition, the Credit Facility also contains customary negative covenants, including, but not limited to, covenants that restrict (subject to certain exceptions) the ability of the Company and the Subsidiary Guarantors to incur indebtedness, grant liens, make investments, engage in mergers and acquisitions, and pay dividends and other restricted payments, and certain financial maintenance covenants. At March 31, 2025, we were subject to the following financial covenants under our Credit Facility: (A) a Total Leverage Ratio not to exceed 5.00 to 1.00 and (B) a Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.20 to 1.00 as of the end of any period of four consecutive fiscal quarters. These financial maintenance covenants are calculated for the Company and its subsidiaries on a consolidated basis. We were in compliance with all of the covenants contained in our Credit Facility at March 31, 2025. Our Credit Facility and acquisition debt consisted of the following (in thousands): March 31, 2025 December 31, 2024 Credit Facility $ 120,000 $ 137,000 Debt issuance costs, net of accumulated amortization of $ 3,035 and $ 2,947 , respectively ( 1,530 ) ( 1,618 ) Total Credit Facility $ 118,470 $ 135,382 Acquisition debt $ 5,437 $ 5,466 Less: current portion ( 581 ) ( 571 ) Total acquisition debt, net of current portion $ 4,856 $ 4,895 At March 31, 2025, we had outstanding borrowings under the Credit Facility of $ 120.0 million. We also had one letter of credit for $ 2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2025 and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At March 31, 2025, we had $ 127.8 million of availability under the Credit Facility. The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands): Three months ended March 31, 2025 2024 Credit Facility interest expense $ 2,499 $ 3,916 Credit Facility amortization of debt issuance costs 88 138 At March 31, 2025, our outstanding borrowings under our Credit Facility bore interest at a prime rate or the SOFR rate, plus an applicable margin based on our leverage ratio. At March 31, 2025, the prime rate margin was equivalent to 1.50 % and the SOFR term margin was 2.50 %. The weighted average interest rate on our Credit Facility was 6.9 % and 8.9 % for the three months ended March 31, 2025 and 2024, respectively. Acquisition debt consists of deferred purchase price and promissory notes payable to sellers. A majority of the deferred purchase price and notes bear no interest and are discounted at imputed interest rates ranging from 6.5 % to 7.3 %. Original maturities typically range from nine to twenty years . The imputed interest expense related to our acquisition debt is as follows (in thousands): Three months ended March 31, 2025 2024 Acquisition debt imputed interest expense $ 94 $ 104 24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 11. SENIOR NOTES The carrying value of our 4.25 % senior notes due 2029 (the “Senior Notes”) is reflected on our Consolidated Balance Sheets as follows (in thousands): March 31, 2025 December 31, 2024 Principal amount $ 400,000 $ 400,000 Debt discount, net of accumulated amortization of $ 1,986 and $ 1,848 , respectively ( 2,514 ) ( 2,652 ) Debt issuance costs, net of accumulated amortization of $ 565 and $ 526 , respectively ( 712 ) ( 751 ) Carrying value of the Senior Notes $ 396,774 $ 396,597 At March 31, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $ 364.4 million. The Senior Notes were issued under an indenture, dated as of May 13, 2021 (the “Indenture”), among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee. The Senior Notes are unsecured, senior obligations and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally by each of the Subsidiary Guarantors. The Senior Notes mature on May 15, 2029, unless earlier redeemed or purchased and bear interest at 4.25 % per year, which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021. The Indenture contains restrictive covenants limiting our ability and our Restricted Subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness or issue certain preferred shares, create liens on certain assets to secure debt, pay dividends or make other equity distributions, purchase or redeem capital stock, make certain investments, sell assets, agree to certain restrictions on the ability of Restricted Subsidiaries to make payments to us, consolidate, merge, sell or otherwise dispose of all or substantially all assets, or engage in transactions with affiliates. The Indenture also contains customary events of default. The interest expense and amortization of debt discount and debt issuance costs related to our Senior Notes are as follows (in thousands): Three months ended March 31, 2025 2024 Senior Notes interest expense $ 4,250 $ 4,250 Senior Notes amortization of debt discount 138 132 Senior Notes amortization of debt issuance costs 39 38 The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 50 months of the Senior Notes. The effective interest rates on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for both the three months ended March 31, 2025 and 2024 were 4.42 % and 4.30 %, respectively. 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 12. LEASES Our lease obligations consist of operating and finance leases related to real estate, vehicles and equipment. The components of lease cost are as follows (in thousands): Three months ended March 31, Income Statement Classification 2025 2024 Operating lease cost Facilities and grounds expense (1) $ 993 $ 978 Short-term lease cost Facilities and grounds expense (1) 56 18 Variable lease cost Facilities and grounds expense (1) ( 60 ) 104 Finance lease cost: Depreciation of leased assets Depreciation and amortization (2) $ 147 $ 126 Interest on lease liabilities Interest expense 188 125 Total finance lease cost 335 251 Total lease cost $ 1,324 $ 1,351 (1) Facilities and grounds expense is included within Cost of service and General, administrative and other on our Consolidated Statements of Operations. (2) Depreciation and amortization expense is included within Field depreciation expense and General, administrative and other on our Consolidated Statements of Operations. Supplemental cash flow information related to our leases is as follows (in thousands): Three months ended March 31, 2025 2024 Cash paid for operating leases included in operating activities $ 1,072 $ 1,071 Cash paid for finance leases included in financing activities 308 277 Right-of-use assets obtained in exchange for new leases are as follows (in thousands): Three months ended March 31, 2025 2024 Right-of-use assets obtained in exchange for new operating lease liabilities $ 159 $ 852 Right-of-use assets obtained in exchange for new finance lease liabilities 3,483 — 26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Supplemental balance sheet information related to leases is as follows (in thousands): Lease Type Balance Sheet Classification March 31, 2025 December 31, 2024 Operating lease right-of-use assets Operating lease right-of-use assets, including HFS $ 14,452 $ 14,953 Less: Held for sale ( 74 ) — Operating lease right-of-use assets $ 14,378 $ 14,953 Finance lease right-of-use assets Property, plant and equipment, net $ 12,047 $ 8,564 Accumulated depreciation Property, plant and equipment, net ( 3,361 ) ( 3,214 ) Finance lease right-of-use assets, net $ 8,686 $ 5,350 Operating lease current liabilities Current portion of operating lease obligations $ 2,843 $ 2,810 Finance lease current liabilities Current portion of finance lease obligations 790 533 Total current lease liabilities Total current lease liabilities, including HFS $ 3,633 $ 3,343 Less: Held for sale ( 22 ) — Total current lease liabilities $ 3,611 $ 3,343 Operating lease non-current liabilities Obligations under operating leases, net of current portion $ 13,432 $ 14,035 Finance lease non-current liabilities Obligations under finance leases, net of current portion 9,152 6,045 Total non-current lease liabilities Total non-current lease liabilities, including HFS $ 22,584 $ 20,080 Less: Held for sale ( 53 ) — Total non-current lease liabilities $ 22,531 $ 20,080 Total lease liabilities, including HFS $ 26,217 $ 23,423 The average lease terms and discount rates at March 31, 2025 are as follows: Weighted-average remaining lease term (years) Weighted-average discount rate Operating leases 6.9 8.1 % Finance leases 18.8 8.4 % The aggregate future lease payments for non-cancelable operating and finance leases at March 31, 2025 are as follows (in thousands): Operating Finance Lease payments due: Remainder of 2025 $ 3,055 $ 989 2026 3,985 1,328 2027 3,743 1,338 2028 3,393 1,097 2029 2,970 1,031 Thereafter 3,906 16,693 Total lease payments $ 21,052 $ 22,476 Less: Interest ( 4,777 ) ( 12,534 ) Present value of lease liabilities, including HFS $ 16,275 $ 9,942 At March 31, 2025, we had no significant operating or finance leases that had not yet commenced . 27 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 13. STOCKHOLDERS’ EQUITY Restricted Stock Restricted stock activity is as follows (in thousands, except shares): Three months ended March 31, 2025 2024 Shares Fair Value Shares Fair Value Granted (1) 114,684 $ 4,764 156,630 $ 3,834 Returned for payroll taxes 28,656 $ 1,168 16,315 $ 418 Cancelled — $ — 26,240 $ 841 (1) Restricted stock granted during the three months ended March 31, 2025 and 2024 vests over a three-year period, if the employee has remained continuously employed by us during the vesting period, at a weighted average stock price of $ 41.54 and $ 24.48 , respectively. We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for restricted stock awards of $ 0.7 million and $ 0.5 million, for the three months ended March 31, 2025 and 2024, respectively. Stock Options Stock option grants and cancellations are as follows (in thousands, except shares): Three months ended March 31, 2025 2024 Shares Fair Value Shares Fair Value Granted (1) — $ — 370,590 $ 3,830 Cancelled 1,180 $ 15 294,728 $ 3,757 (1) Stock options granted during the three months ended March 31, 2024 had a weighted average price of $ 24.48 . The fair value of these options was calculated using the Black-Scholes option pricing model. The options granted in 2024 vest over a three-year period and have a ten-year term. These options will vest if the employee has remained continuously employed by us through the vesting period. Additional stock option activity is as follows (in thousands, except shares): Three months ended March 31, 2025 2024 Shares Cash Shares Cash Exercised (1) 190,415 $ 321 — $ — Returned for option price (2) 112,858 $ 4,493 — $ — Returned for payroll taxes (3) 20,016 $ 799 — $ — (1) Stock options exercised during the three months ended March 31, 2025 had a weighted average exercise price of $ 25.28 with an aggregate intrinsic value of $ 2.7 million. (2) Represents shares withheld/cash received for the payment of the option price. (3) Represents shares withheld/cash paid for the payment of payroll taxes. We recorded stock-based compensation expense, which is included in General, administrative and other expenses , for stock options of $ 0.8 million and $ 0.2 million, for the three months ended March 31, 2025 and 2024, respectively. Performance Awards During the three months ended March 31, 2025, we granted performance awards to our executive leadership team payable in shares. These awards will vest, if at all, provided that certain predetermined performance metrics related to the Company's adjusted consolidated EBITDA (adjusted earnings before interest tax depreciation and amortization) are achieved during the period commencing on the grant date, March 7, 2025, through March 31, 2028, subject to certification by the Compensation Committee of the Board of Directors (“Board”) and the individual remaining continuously employed by us through such date. 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The performance award activity for the three months ended March 31, 2025 is as follows (in thousands, except shares): Three months ended March 31, 2025 2024 Shares Fair Value Shares Fair Value Granted (1) 90,894 $ 3,508 — $ — Returned for payroll taxes 142,070 $ 5,662 — $ — Cancelled — $ — 80,276 $ 871 (1) The fair value of the performance awards granted during the three months ended March 31, 2025 was calculated using the stock price on the grant date of $ 38.59 . For the three months ended March 31, 2025 and 2024, we recorded stock-based compensation expense of $ 0.1 million and stock-based compensation benefit of $ 0.4 million, respectively, for performance awards, which is included in General, administrative and other expenses. Employee Stock Purchase Plan ESPP activity is as follows: Three months ended March 31, 2025 2024 Shares Price Shares Price ESPP 11,135 $ 32.94 16,296 $ 21.26 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: 2025 Dividend yield 1.16 % Expected volatility 28.78 % Risk-free interest rate 4.36 %, 4.25 %, 4.21 %, 4.17 % 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 $ 0.1 million and $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively. Common Stock 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, 2025 2024 Shares Fair Value Shares Fair Value Granted (1) 11,958 $ 496 31,470 $ 790 (1) Common stock granted during the three months ended March 31, 2025 and 2024 had a grant date stock price of $ 41.54 and $ 25.08 , 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 March 31, 2025 2024 Shares Fair Value Shares Fair Value Board of Directors (1) 1,866 $ 72 3,999 $ 108 Advisor to the Board (1) 129 $ 5 184 $ 5 (1) Common stock granted during the three months ended March 31, 2025 and 2024 had a grant date stock price of $ 38.75 and $ 27.04 , respectively. 29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 0.3 million and $ 0.5 million for the three months ended March 31, 2025 and 2024, respectively. Share Repurchase We did not repurchase any shares during the three months ended March 31, 2025 and 2024. At March 31, 2025, our share repurchase program had $ 48.9 million authorized for repurchases. Cash Dividends Our Board declared the following dividends payable on the dates below (in thousands, except per share amounts): 2025 Per Share Dollar Value March 1st $ 0.1125 $ 1,722 2024 Per Share Dollar Value March 1st $ 0.1125 $ 1,686 14. 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, 2025 2024 Numerator for basic and diluted earnings per share: Net income $ 20,926 $ 6,973 Less: Earnings allocated to unvested restricted stock ( 347 ) ( 101 ) Income attributable to common stockholders $ 20,579 $ 6,872 Denominator: Denominator for basic earnings per common share – weighted average shares outstanding 15,243 14,876 Effect of dilutive securities: Stock options 146 17 Performance awards — 416 Denominator for diluted earnings per common share – weighted average shares outstanding 15,389 15,309 Basic earnings per common share: $ 1.35 $ 0.46 Diluted earnings per common share: $ 1.34 $ 0.45 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 March 31, 2025 2024 Antidilutive stock options 189 1,565 30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 15. SEGMENT REPORTING The tables below present revenue, disaggregated by major source for each of our reportable segments, as well as, significant segment expenses, other segment expenses, operating income (loss), depreciation and amortization, interest expense, income (loss) before income taxes, income tax expense (benefit), total assets, long-lived assets, goodwill, capital expenditures and number of operating locations by segment as follows, (in thousands, except number of operating locations) for the three months ended March 31, 2025 and 2024, respectively: Three months ended, March 31, 2025 Funeral Cemetery Corporate Total Revenue Services $ 47,949 $ 5,061 $ — $ 53,010 Merchandise 21,556 4,039 — 25,595 Cemetery property — 19,991 — 19,991 Other revenue 5,114 3,359 — 8,473 Total revenue 74,619 32,450 — 107,069 Less: (1) Salaries, benefits and commission expenses 17,977 9,919 — 27,896 Cost of merchandise 8,132 1,331 — 9,463 Allocated overhead costs (2) 3,227 1,331 — 4,558 Facilities and grounds expenses 2,929 1,205 — 4,134 General and administrative expenses (3) 3,021 895 — 3,916 Other segment expenses (4) 11,146 2,344 12,048 25,538 Operating income (loss) $ 28,187 $ 15,425 $ ( 12,048 ) $ 31,564 Interest expense $ 280 $ 3 $ 7,015 $ 7,298 Depreciation and amortization $ 2,826 $ 2,324 $ 251 $ 5,401 Income (loss) before income taxes $ 30,069 $ 16,016 $ ( 19,831 ) $ 26,254 Income tax expense (benefit) $ 6,104 $ 3,251 $ ( 4,027 ) $ 5,328 Total assets $ 777,995 $ 470,875 $ 26,359 $ 1,275,229 Long-lived assets $ 624,384 $ 200,427 $ 11,247 $ 836,058 Goodwill $ 354,314 $ 56,389 $ — $ 410,703 Capital expenditures $ 727 $ 1,852 $ 584 $ 3,163 Number of operating locations at year end 160 28 — 188 (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the Chief Operating Decision Maker ("CODM"). (2) Allocated overhead costs include: property insurance costs, property tax expenses and corporate overhead fees allocated to the field, such as information technology, human resources, legal and finance. (3) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses and office supplies. (4) The Corporate segment's other segment expenses primarily include general, administrative and other expenses, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses. The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses. 31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Three months ended March 31, 2024 Funeral Cemetery Corporate Total Revenue Services $ 44,807 $ 4,892 $ — $ 49,699 Merchandise 22,659 4,140 — 26,799 Cemetery property — 18,703 — 18,703 Other revenue 4,365 3,927 — 8,292 Total revenue 71,831 31,662 — 103,493 Less: (1) Salaries, benefits and commission expenses 18,298 8,897 — 27,195 Cost of merchandise 7,843 1,156 — 8,999 Allocated overhead costs (2) 3,296 1,156 — 4,452 Facilities and grounds expenses 2,694 1,180 — 3,874 General and administrative expenses (3) 2,773 923 — 3,696 Other segment expenses (4) 13,853 5,708 16,239 35,800 Operating income (loss) $ 23,074 $ 12,642 $ ( 16,239 ) $ 19,477 Interest expense $ 225 $ 4 $ 8,483 $ 8,712 Depreciation and amortization $ 2,968 $ 2,255 $ 237 $ 5,460 Income (loss) before income taxes $ 22,869 $ 12,709 $ ( 24,856 ) $ 10,722 Income tax expense (benefit) $ 7,996 $ 4,444 $ ( 8,691 ) $ 3,749 Total assets $ 790,358 $ 452,517 $ 17,644 $ 1,260,519 Long-lived assets $ 635,574 $ 207,062 $ 6,099 $ 848,735 Goodwill $ 356,878 $ 58,017 $ — $ 414,895 Capital expenditures $ 1,168 $ 2,233 $ 150 $ 3,551 Number of operating locations at year end 165 31 — 196 (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Allocated overhead costs include: property insurance costs, property tax expenses and corporate overhead fees allocated to the field, such as information technology, human resources, legal and finance. (3) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses and office supplies. (4) The Corporate segment's other segment expenses primarily include general, administrative and other expenses, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses. The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses. 32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 16. SUPPLEMENTARY DATA Balance Sheets The following table presents the detail of certain balance sheet accounts (in thousands): March 31, 2025 December 31, 2024 Prepaid and other current assets: Prepaid expenses $ 4,230 $ 3,987 State income tax receivable 355 — Other current assets 137 136 Total prepaid and other current assets, including HFS $ 4,722 $ 4,123 Less: Held for sale ( 3 ) — Total prepaid and other current assets $ 4,719 $ 4,123 Current portion of debt and lease obligations: Acquisition debt $ 581 $ 571 Finance lease obligations 790 533 Operating lease obligations 2,843 2,810 Total current portion of debt and lease obligations, including HFS $ 4,214 $ 3,914 Less: Held for sale ( 22 ) — Total current portion of debt and lease obligations $ 4,192 $ 3,914 Accrued and other liabilities: Incentive compensation $ 2,707 $ 12,860 Insurance 4,308 3,584 Unrecognized tax benefit 3,493 3,471 Vacation 3,114 2,803 Interest 6,521 2,288 Salaries and wages 4,838 4,867 Employee meetings and award trips 2,158 1,550 Income tax payable 1,931 208 Commissions 1,252 1,218 Perpetual care trust payable 656 2,143 Ad valorem taxes 1,249 2,314 Other accrued liabilities 1,945 1,300 Total accrued and other liabilities, including HFS $ 34,172 $ 38,606 Less: Held for sale ( 114 ) ( 146 ) Total accrued and other liabilities $ 34,058 $ 38,460 Other long-term liabilities: Incentive compensation $ 1,009 $ 996 Deferred compensation 49 — Other long-term liabilities — 183 Total other long-term liabilities $ 1,058 $ 1,179 Cash Flow The following information is supplemental disclosure for the Consolidated Statements of Cash Flows (in thousands): Three months ended March 31, 2025 2024 Cash paid for interest and financing costs $ 2,705 $ 4,083 Cash paid for taxes 1,475 461 33 CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS In addition to historical information, this Quarterly Report on Form 10-Q contains certain statements and information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical information, should be deemed to be forward-looking statements. Words such as “may”, “will”, “estimate”, “intend”, “believe”, “expect”, “seek”, “project”, “forecast”, “foresee”, “should”, “would”, “could”, “plan”, “anticipate” and other similar words or expressions may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements include, but are not limited to, statements regarding any projections of earnings, revenue, cash flow, investment returns, capital allocation, debt levels, equity performance, death rates, market share growth, cost inflation, overhead, including talent recruitment, field and corporate incentive compensation, preneed sales or other financial items; any statements of the plans, strategies, objectives and timing of management for future operations or financing activities, including, but not limited to, capital allocation, organizational performance, execution of our strategic objectives and growth strategy, planned divestitures, technology improvements, product development, the ability to obtain credit or financing, anticipated integration, performance and other benefits of recently completed and anticipated acquisitions, and cost management and debt reductions; any statements of the plans, timing and objectives of management for acquisition and divestiture activities; any statements regarding future economic and market conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing and are based on our current expectations and beliefs concerning future developments and their potential effect on us. While we believe these assumptions concerning future events are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenue and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: • our ability to find and retain skilled personnel; • the effects of our talent recruitment efforts, incentive and compensation plans and programs, including such effects on our Standards Operating Model and the Company’s operational and financial performance; • our ability to execute our strategic objectives and growth strategy, if at all; • the potential adverse effects on the Company's business, financial and equity performance if management fails to meet the expectations of its strategic objectives and growth plan; • the execution of our Standards Operating Model and strategic acquisition framework; • the effects of competition; • changes in the number of deaths in our markets, which are not predictable from market to market or over the short term; • changes in consumer preferences and our ability to adapt to or meet those changes; • our ability to generate preneed sales, including implementing our cemetery portfolio sales strategy, product development and optimization plans; • the investment performance of our funeral and cemetery trust funds; • fluctuations in interest rates, including, but not limited to, the effects of increased borrowing costs under our Credit Facility and our ability to minimize such costs, if at all; • the effects of inflation on our operational and financial performance, including the increased overall costs for our goods and services, the impact on customer preferences as a result of changes in discretionary income, and our ability, if at all, to mitigate such effects; • our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; • our ability to meet the timing, objectives and expectations related to our capital allocation framework, including our forecasted rates of return, planned uses of free cash flow and future capital allocation, including debt repayment plans, internal growth projects, potential strategic acquisitions, share repurchases, or dividend increases; • our ability to meet the projected financial and performance guidance of our full year outlook, if at all; • the timely and full payment of death benefits related to preneed funeral contracts funded through life insurance contracts; • the financial condition of third-party insurance companies that fund our preneed funeral contracts; • increased or unanticipated costs, such as merchandise, goods, insurance or taxes, and our ability to mitigate or minimize such costs, if at all; • our level of indebtedness and the cash required to service our indebtedness; 34 • changes in federal income tax laws and regulations and the implementation and interpretation of these laws and regulations by the Internal Revenue Service; • effects of the application of other applicable laws and regulations, including changes in such regulations or the interpretation thereof; • the potential impact of epidemics and pandemics, including any new or emerging public health threats, on customer preferences and on our business; • government, social, business and other actions that have been and will be taken in response to pandemics and epidemics, including potential responses to any new or emerging public health threats; • effects and expense of litigation; • consolidation in the funeral and cemetery industry; • our ability to identify and consummate strategic acquisitions, if at all, and successfully integrate acquired businesses with our existing businesses, including expected performance and financial improvements related thereto; • the effects of any additional imposition or changes in tariffs or trade agreements including, but not limited to, any potential disruptions in international trade, any increased inflationary pressures on the economy or costs for our goods, and our ability, if at all, to mitigate such effects; • economic, financial and stock market fluctuations; • interruptions or security lapses of our information technology, including any cybersecurity or ransomware incidents; • adverse developments affecting the financial services industry; • acts of war or terrorists acts and the governmental or military response to such acts; • our failure to maintain effective control over financial reporting; and • other factors and uncertainties inherent in the funeral and cemetery industry. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see (i) Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and (ii) Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. 35