CARRIAGE SERVICES INC 10-Q

Item 1. Financial Statements. CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except share data) June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,398 $ 1,165 Accounts receivable, net 34,830 30,193 Inventories 7,580 7,920 Prepaid and other current assets 7,454 4,123 Current assets held for sale 61 1,135 Total current assets 51,323 44,536 Preneed cemetery trust investments 99,908 98,120 Preneed funeral trust investments 108,167 106,219 Preneed cemetery receivables, net 56,717 50,958 Receivables from preneed funeral trusts, net 22,024 22,372 Property, plant, and equipment, net 271,445 273,004 Cemetery property, net 110,574 109,576 Goodwill 410,703 414,859 Intangible and other non-current assets, net 40,382 40,427 Operating lease right-of-use assets 14,268 14,953 Cemetery perpetual care trust investments 86,744 85,103 Non-current assets held for sale 3,459 19,453 Total assets $ 1,275,714 $ 1,279,580 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt and lease obligations $ 4,745 $ 3,914 Accounts payable 16,691 15,427 Accrued and other liabilities 26,897 38,460 Current liabilities held for sale 130 240 Total current liabilities 48,463 58,041 Acquisition debt, net of current portion 4,817 4,895 Long-term liabilities held for sale 1,743 13,842 Credit facility 111,458 135,382 Senior notes 396,954 396,597 Obligations under finance leases, net of current portion 8,908 6,045 Obligations under operating leases, net of current portion 12,923 14,035 Deferred preneed cemetery revenue 64,379 61,767 Deferred preneed funeral revenue 39,437 39,261 Deferred tax liability 54,693 51,429 Other long-term liabilities 1,334 1,179 Deferred preneed cemetery receipts held in trust 99,908 98,120 Deferred preneed funeral receipts held in trust 108,167 106,219 Care trusts’ corpus 87,110 84,218 Total liabilities 1,040,294 1,071,030 Commitments and contingencies: Stockholders’ equity: Common stock, $ 0.01 par value; 80,000,000 shares authorized and 27,328,939 and 26,881,355 shares issued, respectively and 15,701,121 and 15,253,537 shares outstanding, respectively 273 269 Additional paid-in capital 238,026 243,825 Retained earnings 275,874 243,209 Treasury stock, at cost; 11,627,818 shares ( 278,753 ) ( 278,753 ) Total stockholders’ equity 235,420 208,550 Total liabilities and stockholders’ equity $ 1,275,714 $ 1,279,580 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 3 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue: Service revenue $ 46,510 $ 44,433 $ 99,520 $ 94,132 Property and merchandise revenue 46,513 49,590 92,099 95,092 Other revenue 9,124 8,295 17,597 16,587 102,147 102,318 209,216 205,811 Field costs and expenses: Cost of service 23,787 21,672 48,364 45,380 Cost of merchandise 32,156 31,981 64,765 63,931 Cemetery property amortization 2,241 2,560 4,069 4,316 Field depreciation expense 3,288 3,405 6,610 6,872 Regional and unallocated funeral and cemetery costs 3,260 4,245 8,495 8,087 Other expenses 1,480 1,462 3,136 2,970 66,212 65,325 135,439 131,556 Gross profit 35,935 36,993 73,777 74,255 Corporate costs and expenses: General, administrative and other 11,938 18,601 23,986 34,841 Net (gain) loss on divestitures, disposals, and impairments charges ( 1 ) 23 ( 5,771 ) 1,568 Operating income 23,998 18,369 55,562 37,846 Interest expense 7,034 8,324 14,332 17,036 Net gain on property damage, net of insurance claims — ( 417 ) — ( 417 ) Other, net 107 3 ( 1,881 ) 46 Income before income taxes 16,857 10,459 43,111 21,181 Expense for income taxes 5,260 3,513 13,451 7,032 (Benefit) expense related to discrete income tax items ( 142 ) 687 ( 3,005 ) 917 Total expense for income taxes 5,118 4,200 10,446 7,949 Net income $ 11,739 $ 6,259 $ 32,665 $ 13,232 Basic earnings per common share: $ 0.75 $ 0.41 $ 2.09 $ 0.87 Diluted earnings per common share: $ 0.74 $ 0.40 $ 2.07 $ 0.85 Dividends declared per common share: $ 0.1125 $ 0.1125 $ 0.2250 $ 0.2250 Weighted average number of common and common equivalent shares outstanding: Basic 15,458 14,965 15,352 14,920 Diluted 15,653 15,403 15,528 15,356 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 4 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Six months ended June 30, 2025 2024 Cash flows from operating activities: Net income $ 32,665 $ 13,232 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,574 11,664 Provision for credit losses 1,973 1,447 Stock-based compensation expense 3,845 2,671 Deferred income tax (benefit) expense 3,264 ( 1,477 ) Amortization of intangibles 660 669 Amortization of debt issuance costs 255 352 Amortization and accretion of debt 278 266 Net (gain) loss on divestitures, disposals, and impairment charges ( 5,771 ) 1,568 Net gain on property damage, net of insurance claims — ( 417 ) Gain on sale of excess real property ( 1,993 ) — Changes in operating assets and liabilities that provided (used) cash: Accounts and preneed receivables ( 11,430 ) ( 13,939 ) Inventories, prepaid, and other current assets ( 3,136 ) 1,224 Intangible and other non-current assets ( 1,117 ) ( 2,339 ) Preneed funeral and cemetery trust investments ( 4,281 ) ( 9,523 ) Accounts payable ( 2,245 ) 3,084 Accrued and other liabilities ( 10,458 ) ( 3,999 ) Deferred preneed funeral and cemetery revenue 1,941 7,064 Deferred preneed funeral and cemetery receipts held in trust 5,853 10,313 Net cash provided by operating activities 21,877 21,860 Cash flows from investing activities: Proceeds from divestitures and sale of other assets 18,822 11,174 Proceeds from insurance claims — 314 Capital expenditures ( 6,009 ) ( 7,096 ) Net cash provided by investing activities 12,813 4,392 Cash flows from financing activities: Borrowings from the credit facility 24,600 24,800 Payments against the credit facility ( 48,700 ) ( 48,900 ) Payments on acquisition debt and obligations under finance leases ( 221 ) ( 305 ) Proceeds from the exercise of stock options and employee stock purchase plan contributions 983 1,942 Taxes paid on restricted stock, performance award vestings, and exercise of stock options ( 7,631 ) ( 419 ) Dividends paid on common stock ( 3,488 ) ( 3,390 ) Net cash used in financing activities ( 34,457 ) ( 26,272 ) Net increase (decrease) in cash and cash equivalents 233 ( 20 ) Cash and cash equivalents at beginning of period 1,165 1,523 Cash and cash equivalents at end of period $ 1,398 $ 1,503 Supplemental disclosure of cash flow information: Cash paid for interest and financing costs $ 13,614 $ 16,258 Cash paid for taxes 9,884 9,200 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 5 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited and in thousands) Three months ended June 30, 2025 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - March 31, 2025 15,693 $ 273 $ 237,407 $ 264,135 $ ( 278,753 ) $ 223,062 Net income — — — 11,739 — 11,739 Issuance of common stock from employee stock purchase plan 9 — 295 — — 295 Issuance of common stock to directors and board advisor 1 — 63 — — 63 Exercise of stock options 2 — — — — — Restricted common stock, performance awards and stock options surrendered for taxes paid ( 4 ) — ( 2 ) — — ( 2 ) Stock-based compensation expense — — 2,029 — — 2,029 Dividends on common stock ($ 0.1125 per share) — — ( 1,766 ) — — ( 1,766 ) Balance - June 30, 2025 15,701 $ 273 $ 238,026 $ 275,874 $ ( 278,753 ) $ 235,420 Three months ended June 30, 2024 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total 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 Restricted common stock and stock options surrendered for taxes paid — — ( 1 ) — — ( 1 ) Stock-based compensation expense — — 2,031 — — 2,031 Dividends on common stock ($ 0.1125 per share) — — ( 1,704 ) — — ( 1,704 ) Balance - June 30, 2024 15,236 $ 269 $ 242,883 $ 223,488 $ ( 278,753 ) $ 187,887 6 Six months ended June 30, 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 — — — 32,665 — 32,665 Issuance of common stock from employee stock purchase plan 20 — 662 — — 662 Issuance of common stock to directors and board advisor 3 — 140 — — 140 Issuance of common stock 271 3 ( 3 ) — — — Issuance of restricted common stock 115 1 ( 1 ) — — — Exercise of stock options 79 — 321 — — 321 Restricted common stock, performance awards and stock options surrendered for taxes paid ( 53 ) — ( 7,631 ) — — ( 7,631 ) Stock-based compensation expense — — 3,705 — — 3,705 Dividends on common stock ($ 0.2250 per share) — — ( 3,488 ) — — ( 3,488 ) Other 12 — 496 — — 496 Balance - June 30, 2025 15,701 $ 273 $ 238,026 $ 275,874 $ ( 278,753 ) $ 235,420 Six months ended June 30, 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 — — — 13,232 — 13,232 Issuance of common stock from employee stock purchase plan 31 — 671 — — 671 Issuance of common stock to directors and board advisor 10 — 264 — — 264 Issuance of common stock — — — — — — Issuance of restricted common stock 157 2 ( 2 ) — — — Exercise of stock options 50 1 1,271 — — 1,272 Restricted common stock and stock options surrendered for taxes paid ( 43 ) — ( 419 ) — — ( 419 ) Stock-based compensation expense — — 2,407 — — 2,407 Dividends on common stock ($ 0.2250 per share) — — ( 3,390 ) — — ( 3,390 ) Other 31 — 790 — — 790 Balance - June 30, 2024 15,236 $ 269 $ 242,883 $ 223,488 $ ( 278,753 ) $ 187,887 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 7 NOTES TO UNAUDITED CONDENSED 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 June 30, 2025, we operated 159 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 Condensed Consolidated Financial Statements include the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Our interim Condensed 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 Condensed 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 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 June 30, 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. 8 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): June 30, 2025 December 31, 2024 Accounts receivable, net $ 1 $ 833 Inventories 57 302 Prepaid and other current assets 3 — Current assets held for sale $ 61 $ 1,135 Preneed cemetery trust investments $ 1,104 $ 4,876 Preneed funeral trust investments 177 2,197 Preneed cemetery receivables, net 5 1,671 Receivables from funeral preneed trusts, net 27 — Property, plant, and equipment, net 1,404 4,898 Cemetery property, net 127 3,362 Intangible and other non-current assets, net 224 215 Operating lease right-of-use assets 69 — Cemetery perpetual care trust investments 322 2,234 Non-current assets held for sale $ 3,459 $ 19,453 Current portion of operating lease obligations $ 23 $ — Accounts payable 24 94 Accrued and other liabilities 83 146 Current liabilities held for sale $ 130 $ 240 Obligations under operating leases, net of current portion $ 47 $ — Deferred preneed cemetery revenue 66 3,517 Deferred preneed funeral revenue 27 1,018 Deferred preneed cemetery receipts held in trust 1,104 4,876 Deferred preneed funeral receipts held in trust 177 2,197 Care trusts’ corpus 322 2,234 Long-term liabilities held for sale $ 1,743 $ 13,842 Property, Plant, and Equipment Property, plant, and equipment is comprised of the following (in thousands): June 30, 2025 December 31, 2024 Land $ 85,479 $ 86,609 Buildings and improvements 261,978 265,231 Furniture, equipment and vehicles 70,602 72,052 Property, plant, and equipment, at cost 418,059 423,892 Less: accumulated depreciation ( 145,210 ) ( 145,990 ) Property, plant, and equipment, net $ 272,849 $ 277,902 Less: Held for sale ( 1,404 ) ( 4,898 ) Property, plant, and equipment, net $ 271,445 $ 273,004 During the six months ended June 30, 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 Condensed Consolidated Financial Statements. Additionally, during the six months ended June 30, 2025, we sold real property for $ 3.0 million, with a carrying value of $ 1.0 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. 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 (gain) 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. Our growth and maintenance capital expenditures totaled $ 1.4 million and $ 1.9 million for the three months ended June 30, 2025 and 2024, respectively, and $ 3.0 million and $ 3.5 million for the six months ended June 30, 2025 and 2024, respectively. In addition, we recorded depreciation expense of $ 3.3 million and $ 3.5 million for the three months ended June 30, 2025 and 2024, respectively, and $ 6.8 million and $ 7.2 million for the six months ended June 30, 2025 and 2024, respectively. Cemetery Property Cemetery property was $ 110.7 million and $ 112.9 million, net of accumulated amortization of $ 73.7 million and $ 72.6 million at June 30, 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 $ 1.4 million and $ 1.6 million for the three months ended June 30, 2025 and 2024, respectively, and $ 3.0 million and $ 3.5 million for the six months ended June 30, 2025 and 2024, respectively. We recorded amortization expense for cemetery interment rights of $ 2.2 million and $ 2.6 million for the three months ended June 30, 2025 and 2024, respectively, and $ 4.1 million and $ 4.3 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 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 Condensed Consolidated Financial Statements. 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 (gain) loss on divestitures, disposals, and impairment charges on our Consolidated Statements of Operations. Income Taxes Income tax expense was $ 5.1 million and $ 4.2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 10.4 million and $ 7.9 million for the six months ended June 30, 2025 and 2024, respectively. Our operating tax rate before discrete items was 31.2 % and 33.6 % for the six months ended June 30, 2025 and 2024, respectively, and 31.2 % and 33.2 % for the three months ended June 30, 2025 and 2024, respectively. 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 has no material impact on our consolidated financial statements as it modified disclosure requirements only. 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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, 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 condensed 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): June 30, 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 six months ended June 30, 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 six months ended June 30, 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 June 30, 2025, we merged one funeral home with another business we own in an existing market. During the six months ended June 30, 2025, we sold two funeral homes and three cemeteries for an aggregate of $ 15.8 million and merged one funeral homes with another business we own in an existing market. 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. 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 June 30, Six months ended, June 30, 2025 2024 2025 2024 Revenue $ ( 3 ) $ 121 $ 1,650 $ 1,272 Operating income 42 33 518 151 Income on divestitures (1) 1 ( 8 ) 5,938 ( 1,509 ) Income tax (expense) benefit ( 13 ) ( 8 ) ( 2,014 ) 451 Net gain (loss) from divested operations, after tax $ 30 $ 17 $ 4,442 $ ( 907 ) (1) Net loss on divestitures is recorded in Net (gain) loss on divestitures, disposals, and impairment charges on our Consolidated Statements of Operations. 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 . Accounts receivable is comprised of the following (in thousands): June 30, 2025 Column1 Funeral Cemetery Corporate Held for Sale Total Trade and financed receivables $ 6,972 $ 26,292 $ — $ ( 1 ) $ 33,263 Other receivables 969 1,425 713 — 3,107 Allowance for credit losses ( 358 ) ( 1,182 ) — — ( 1,540 ) Accounts receivable, net $ 7,583 $ 26,535 $ 713 $ ( 1 ) $ 34,830 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. The following table summarizes the activity in our allowance for credit losses by portfolio segment for the six months ended June 30, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs Recoveries June 30, 2025 Trade and financed receivables: Funeral $ 302 $ ( 518 ) $ 232 $ ( 374 ) $ ( 358 ) Cemetery ( 1,014 ) ( 577 ) 1,591 — — Total allowance for credit losses on trade and financed receivables $ ( 712 ) $ ( 1,095 ) $ 1,823 $ ( 374 ) $ ( 358 ) Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheets of $ 8.9 million and $ 10.2 million at June 30, 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): June 30, 2025 December 31, 2024 Interment rights $ 87,512 $ 79,436 Merchandise and services 13,614 13,128 Unearned finance charges 4,787 4,983 Cemetery receivables $ 105,913 $ 97,547 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The components of our cemetery receivables are as follows (in thousands): June 30, 2025 December 31, 2024 Cemetery receivables $ 105,913 $ 97,547 Less: unearned finance charges ( 4,787 ) ( 4,983 ) Cemetery receivables, at amortized cost $ 101,126 $ 92,564 Less: allowance for contract cancellation and credit losses ( 3,544 ) ( 3,018 ) Less: balances due on undelivered cemetery preneed contracts ( 15,750 ) ( 13,576 ) Less: amounts in accounts receivable ( 25,110 ) ( 23,341 ) Preneed cemetery receivables, net including HFS $ 56,722 $ 52,629 Less: Held for sale ( 5 ) ( 1,671 ) Preneed cemetery receivables, net $ 56,717 $ 50,958 The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the six months ended June 30, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs June 30, 2025 Total allowance for credit losses on Preneed cemetery receivables, net $ ( 2,004 ) $ ( 878 ) $ 520 $ ( 2,362 ) The amortized cost basis of our cemetery receivables by year of origination as of June 30, 2025 is as follows (in thousands): 2025 2024 2023 2022 2021 Prior Total Total cemetery receivables, at amortized cost $ 30,003 $ 39,497 $ 17,377 $ 9,396 $ 3,431 $ 1,422 $ 101,126 The aging of past due cemetery receivables as of June 30, 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 $ 1,857 $ 1,142 $ 668 $ 3,263 $ 6,930 $ 78,446 $ 85,376 Deferred revenue 515 168 184 626 1,493 19,044 20,537 Total contracts $ 2,372 $ 1,310 $ 852 $ 3,889 $ 8,423 $ 97,490 $ 105,913 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 $ 15.8 million and $ 13.6 million at June 30, 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 9) and Senior Notes (as defined in Note 10) are classified within Level 2 of the Fair Value Measurements hierarchy. At June 30, 2025, the carrying value and fair value of our Credit Facility was $ 112.9 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 June 30, 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 $ 378.3 million at June 30, 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 investments pursuant to the three-level valuation hierarchy. Our Level 1 investments include cash, common stock and equity 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 June 30, 2025 because the investments include restrictions that do not allow for liquidation until 2027. As of June 30, 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 48 % 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 52 % of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions. As of June 30, 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 Condensed 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 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. 14 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): June 30, 2025 December 31, 2024 Preneed cemetery trust investments, at market value $ 104,114 $ 106,143 Less: allowance for contract cancellation ( 3,102 ) ( 3,147 ) Preneed cemetery trust investments $ 101,012 $ 102,996 Less: Held for sale ( 1,104 ) ( 4,876 ) Preneed cemetery trust investments $ 99,908 $ 98,120 The cost and market values associated with preneed cemetery trust investments at June 30, 2025, are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 17,436 $ — $ — $ 17,436 Fixed income securities: U.S. agency obligations 2 526 — ( 30 ) 496 Foreign debt 2 1,542 85 — 1,627 Corporate debt 2 2,725 167 ( 46 ) 2,846 Preferred stock 2 43 1 — 44 Certificates of deposit 2 79 — ( 5 ) 74 Common stock 1 14,838 1,435 ( 1,754 ) 14,519 Limited partnership fund 3,550 — ( 237 ) 3,313 Mutual funds: Equity 1 500 — ( 5 ) 495 Fixed income 2 37,791 272 ( 53 ) 38,010 Alternative investments 24,384 139 — 24,523 Trust securities $ 103,414 $ 2,099 $ ( 2,130 ) $ 103,383 Accrued investment income $ 731 $ 731 Preneed cemetery trust investments $ 104,114 Market value as a percentage of cost 100.0 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ 74 Due in one to five years 2,120 Due in five to ten years 211 Thereafter 2,682 Total fixed income securities $ 5,087 15 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 June 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): June 30, 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 $ — $ — $ 496 $ ( 30 ) $ 496 $ ( 30 ) Foreign debt — — — — — — Corporate debt — — 6 ( 46 ) 6 ( 46 ) Preferred stock — — — — — — Certificates of deposit — — 74 ( 5 ) 74 ( 5 ) Total fixed income securities with an unrealized loss $ — $ — $ 576 $ ( 81 ) $ 576 $ ( 81 ) 16 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Investment income $ 770 $ 844 $ 1,417 $ 1,383 Realized gains 6,199 924 8,202 11,500 Realized losses ( 5,494 ) ( 4,747 ) ( 7,097 ) ( 8,511 ) Unrealized gains (losses), net ( 886 ) 2,023 ( 31 ) ( 4,936 ) Expenses and taxes ( 585 ) ( 705 ) ( 809 ) ( 1,339 ) Net change in deferred preneed cemetery receipts held in trust ( 4 ) 1,661 ( 1,682 ) 1,903 $ — $ — $ — $ — Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Purchases $ ( 38,172 ) $ ( 6,784 ) $ ( 41,678 ) $ ( 11,110 ) Sales 29,933 5,177 48,002 21,737 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): June 30, 2025 December 31, 2024 Preneed funeral trust investments, at market value $ 111,668 $ 111,721 Less: allowance for contract cancellation ( 3,324 ) ( 3,305 ) Preneed funeral trust investments $ 108,344 $ 108,416 Less: Held for sale ( 177 ) ( 2,197 ) Preneed funeral trust investments $ 108,167 $ 106,219 17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The cost and market values associated with preneed funeral trust investments at June 30, 2025 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 31,781 $ — $ — $ 31,781 Fixed income securities: U.S agency obligations 2 305 — ( 21 ) 284 Foreign debt 2 1,397 81 — 1,478 Corporate debt 2 2,503 156 — 2,659 Common stock 1 13,570 1,343 ( 1,460 ) 13,453 Limited partnership fund 3,325 — ( 222 ) 3,103 Mutual funds: Equity 1 — — — — Fixed income 2 33,196 252 ( 49 ) 33,399 Other investments 2 1,880 — — 1,880 Alternative investments 22,838 131 — 22,969 Trust securities $ 110,795 $ 1,963 $ ( 1,752 ) $ 111,006 Accrued investment income $ 662 $ 662 Preneed cemetery trust investments $ 111,668 Market value as a percentage of cost 100.2 % 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 1,858 Due in five to ten years 98 Thereafter 2,465 Total fixed income securities $ 4,421 18 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 June 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): June 30, 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 $ — $ — $ 283 $ ( 21 ) $ 283 $ ( 21 ) Foreign debt — — — — — — Corporate debt — — — — — — Preferred stock — — — — — — Total fixed income securities with an unrealized loss $ — $ — $ 283 $ ( 21 ) $ 283 $ ( 21 ) 19 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Investment income $ 521 $ 675 994 1,111 Realized gains 5,521 846 7,448 10,626 Realized losses ( 4,519 ) ( 4,295 ) ( 6,228 ) ( 7,504 ) Unrealized gains (losses), net ( 1,102 ) 1,873 211 ( 3,975 ) Expenses and taxes ( 365 ) ( 296 ) ( 470 ) ( 667 ) Net change in deferred preneed funeral receipts held in trust ( 56 ) 1,197 ( 1,955 ) 409 $ — $ — $ — $ — Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Purchases $ ( 33,083 ) $ ( 6,211 ) ( 36,455 ) ( 10,214 ) Sales 25,098 4,608 42,457 19,726 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): June 30, 2025 December 31, 2024 Cemetery perpetual care trust investments, at market value $ 87,066 $ 87,337 Obligations due to (due from) trust 366 ( 885 ) Care trusts’ corpus, including HFS $ 87,432 $ 86,452 Less: Held for sale ( 322 ) ( 2,234 ) Care trusts' corpus $ 87,110 $ 84,218 20 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 June 30, 2025 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 8,552 $ — $ — $ 8,552 Fixed income securities: Foreign debt 2 1,413 76 — 1,489 Corporate debt 2 2,517 147 ( 145 ) 2,519 Preferred stock 2 112 — ( 2 ) 110 Common stock 1 13,521 1,353 ( 1,741 ) 13,133 Limited partnership fund 3,126 — ( 209 ) 2,917 Mutual funds: Equity 1 750 — ( 8 ) 742 Fixed income 2 35,130 241 ( 48 ) 35,323 Alternative investments 21,468 123 — 21,591 Trust securities $ 86,589 $ 1,940 $ ( 2,153 ) $ 86,376 Accrued investment income $ 690 $ 690 Preneed cemetery trust investments $ 87,066 Market value as a percentage of cost 99.8 % 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 1,590 Due in five to ten years 110 Thereafter 2,418 Total fixed income securities $ 4,118 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 % 21 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 June 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): June 30, 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 $ — $ — $ — $ — $ — $ — Corporate debt — — 18 ( 145 ) 18 ( 145 ) Preferred stock 111 ( 2 ) — — 111 ( 2 ) Total fixed income securities with an unrealized loss $ 111 $ ( 2 ) $ 18 $ ( 145 ) $ 129 $ ( 147 ) 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Realized gains $ 1,028 $ 113 1,279 1,419 Realized losses ( 1,228 ) ( 663 ) $ ( 1,429 ) $ ( 1,089 ) Unrealized gains (losses), net ( 901 ) 1,840 ( 213 ) ( 4,229 ) Net change in care trusts’ corpus 1,101 ( 1,290 ) 363 3,899 $ — $ — $ — $ — Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Investment income $ 2,420 $ 3,495 $ 4,907 $ 6,624 Realized losses ( 587 ) ( 751 ) ( 1,259 ) ( 1,125 ) Total $ 1,833 $ 2,744 $ 3,648 $ 5,499 Purchases and sales of investments in the perpetual care trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Purchases $ ( 35,774 ) $ ( 5,464 ) $ ( 38,896 ) $ ( 9,113 ) Sales 26,968 4,469 $ 42,931 $ 19,130 22 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): June 30, 2025 December 31, 2024 Preneed funeral trust funds, at cost $ 22,733 $ 23,063 Less: allowance for contract cancellation ( 682 ) ( 691 ) Receivables from preneed funeral trusts, net including HFS $ 22,051 $ 22,372 Less: Held for sale ( 27 ) — Receivables from preneed funeral trusts, net $ 22,024 $ 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 June 30, 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 June 30, 2025, is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 6,964 $ 6,964 Fixed income investments 12,530 12,530 Mutual funds and common stocks 3,235 3,082 Annuities 4 4 Total $ 22,733 $ 22,580 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. CREDIT FACILITY AND ACQUISITION DEBT At June 30, 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 10) 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 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) 23 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 June 30, 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 June 30, 2025. Our Credit Facility and acquisition debt consisted of the following (in thousands): June 30, 2025 December 31, 2024 Credit Facility $ 112,900 $ 137,000 Debt issuance costs, net of accumulated amortization of $ 3,124 and $ 2,947 , respectively ( 1,442 ) ( 1,618 ) Total Credit Facility $ 111,458 $ 135,382 Acquisition debt $ 5,408 $ 5,466 Less: current portion ( 591 ) ( 571 ) Total acquisition debt, net of current portion $ 4,817 $ 4,895 At June 30, 2025, we had outstanding borrowings under the Credit Facility of $ 112.9 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 June 30, 2025, we had $ 134.9 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Credit Facility interest expense 2,102 3,523 $ 4,601 $ 7,439 Credit Facility amortization of debt issuance costs 89 138 177 276 At June 30, 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 June 30, 2025, the prime rate margin was equivalent to 1.125 % and the SOFR term margin was 2.125 %. The weighted average interest rate on our Credit Facility was 6.8 % and 8.7 % for the three months ended June 30, 2025 and 2024, respectively, and 6.9 % and 8.8 % for the six months ended June 30, 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Acquisition debt imputed interest expense $ 93 $ 103 187 207 24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 10. 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): June 30, 2025 December 31, 2024 Principal amount $ 400,000 $ 400,000 Debt discount, net of accumulated amortization of $ 2,126 and $ 1,848 , respectively ( 2,374 ) ( 2,652 ) Debt issuance costs, net of accumulated amortization of $ 605 and $ 526 , respectively ( 672 ) ( 751 ) Carrying value of the Senior Notes $ 396,954 $ 396,597 At June 30, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $ 378.3 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Senior Notes interest expense 4,250 4,250 $ 8,500 $ 8,500 Senior Notes amortization of debt discount 140 134 278 266 Senior Notes amortization of debt issuance costs 40 38 79 76 The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 47 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 and six months ended June 30, 2025 and 2024 were 4.42 % and 4.30 %, respectively. 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 11. EARNINGS PER SHARE The following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Numerator for basic and diluted earnings per share: Net income $ 11,739 $ 6,259 $ 32,665 $ 13,232 Less: Earnings allocated to unvested restricted stock ( 175 ) ( 93 ) ( 510 ) ( 194 ) Income attributable to common stockholders $ 11,564 $ 6,166 $ 32,155 $ 13,038 Denominator: Denominator for basic earnings per common share – weighted average shares outstanding 15,458 14,965 15,352 14,920 Effect of dilutive securities: Stock options 195 22 176 20 Performance awards — 416 — 416 Denominator for diluted earnings per common share – weighted average shares outstanding 15,653 15,403 15,528 15,356 Basic earnings per common share: $ 0.75 $ 0.41 $ 2.09 $ 0.87 Diluted earnings per common share: $ 0.74 $ 0.40 $ 2.07 $ 0.85 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, 2025 2024 2025 2024 Antidilutive stock options 228 1,433 224 1,456 26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 12. SEGMENT REPORTING Our Chief Operating Decision Maker (the “CODM”), who is the Chief Executive Officer, utilizes segment operating income (loss) for resource allocation across segments, particularly during the annual budgeting and forecasting processes. The CODM examines variances on a monthly basis to make informed decisions regarding capital and personnel distribution among segments. Additionally, the CODM employs segment gross profit for product pricing evaluation and uses segment adjusted operating profit to assess each segment’s performance by comparing results and return on assets against expected outcomes. 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), capital expenditures and number of operating locations by segment as follows, (in thousands, except number of operating locations) for the three and six months ended June 30, 2025 and 2024, respectively: Three months ended June 30, 2025 Funeral Cemetery Corporate Total Revenue Services $ 41,308 $ 5,202 $ — $ 46,510 Merchandise 18,264 4,330 — 22,594 Cemetery property — 23,919 — 23,919 Other revenue 5,675 3,449 — 9,124 Total revenue 65,247 36,900 — 102,147 Less: Salaries, benefits and commission expenses 17,011 10,533 — 27,544 Cost of merchandise 6,847 1,368 — 8,215 Allocated overhead costs (1) 3,386 1,368 — 4,754 Facilities and grounds expenses 2,709 1,560 — 4,269 General and administrative expenses (2) 2,703 956 — 3,659 Other segment expenses (3) 10,912 6,858 11,938 29,708 Operating income (loss) $ 21,679 $ 14,257 $ ( 11,938 ) $ 23,998 Interest expense $ 404 $ 3 $ 6,627 $ 7,034 Depreciation and amortization $ 2,835 $ 2,694 $ 644 $ 6,173 Income (loss) before income taxes $ 21,798 $ 15,062 $ ( 20,003 ) $ 16,857 Income tax expense (benefit) $ 6,463 $ 4,279 $ ( 5,624 ) $ 5,118 (1) 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. (2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses, and office supplies. (3) 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. 27 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Three months ended June 30, 2024 Funeral Cemetery Corporate Total Revenue Services $ 39,589 $ 4,844 $ — $ 44,433 Merchandise 19,664 4,483 — 24,147 Cemetery property — 25,443 — 25,443 Other revenue 4,342 3,953 — 8,295 Total revenue 63,595 38,723 — 102,318 Less: Salaries, benefits and commission expenses 16,860 10,288 — 27,148 Cost of merchandise 6,698 1,201 — 7,899 Allocated overhead costs (1) 3,310 1,201 — 4,511 Facilities and grounds expenses 2,369 1,622 — 3,991 General and administrative expenses (2) 2,499 879 — 3,378 Other segment expenses (4) 11,091 7,329 18,602 37,022 Operating income (loss) $ 20,768 $ 16,203 $ ( 18,602 ) $ 18,369 Interest expense $ 222 $ 3 $ 8,099 $ 8,324 Depreciation and amortization $ 2,907 $ 3,058 $ 239 $ 6,204 Income (loss) before income taxes $ 21,032 $ 16,303 $ ( 26,876 ) $ 10,459 Income tax expense (benefit) $ 8,479 $ 6,444 $ ( 10,723 ) $ 4,200 (1) 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. (2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses and office supplies. (3) 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. 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Six months ended, June 30, 2025 Funeral Cemetery Corporate Total Revenue Services $ 89,257 $ 10,263 $ — $ 99,520 Merchandise 39,820 8,369 — 48,189 Cemetery property — 43,910 — 43,910 Other revenue 10,789 6,808 — 17,597 Total revenue 139,866 69,350 — 209,216 Less: Salaries, benefits and commission expenses 34,988 20,452 — 55,440 Cost of merchandise 14,979 2,699 — 17,678 Allocated overhead costs (1) 6,613 2,699 — 9,312 Facilities and grounds expenses 5,638 2,765 — 8,403 General and administrative expenses (2) 5,724 1,851 — 7,575 Other segment expenses (3) 22,058 9,202 23,986 55,246 Operating income (loss) $ 49,866 $ 29,682 $ ( 23,986 ) $ 55,562 Interest expense $ 684 $ 6 $ 13,642 $ 14,332 Depreciation and amortization $ 5,661 $ 5,018 $ 895 $ 11,574 Income (loss) before income taxes $ 51,867 $ 31,078 $ ( 39,834 ) $ 43,111 Income tax expense (benefit) $ 12,567 $ 7,530 $ ( 9,651 ) $ 10,446 Capital expenditures $ 1,258 $ 3,701 $ 1,049 $ 6,008 Number of operating locations at year end 159 28 — 187 (1) 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. (2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses, and office supplies. (3) 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. 29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Six months ended June 30, 2024 Funeral Cemetery Corporate Total Revenue 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 revenue 135,426 70,385 — 205,811 Less: (1) Salaries, benefits and commission expenses 35,158 19,185 — 54,343 Cost of merchandise 14,541 2,357 — 16,898 Allocated overhead costs (2) 6,606 2,357 — 8,963 Facilities and grounds expenses 5,063 2,802 — 7,865 General and administrative expenses (3) 5,272 1,802 — 7,074 Other segment expenses (4) 24,944 13,037 34,841 72,822 Operating income (loss) $ 43,842 $ 28,845 $ ( 34,841 ) $ 37,846 Interest expense $ 447 $ 7 $ 16,582 $ 17,036 Depreciation and amortization $ 5,875 $ 5,313 $ 476 $ 11,664 Income (loss) before income taxes $ 43,901 $ 29,012 $ ( 51,732 ) $ 21,181 Income tax expense (benefit) $ 16,475 $ 10,888 $ ( 19,414 ) $ 7,949 Capital expenditures $ 2,415 $ 4,472 $ 209 $ 7,096 Number of operating locations at year end 164 31 — 195 (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. 13. SUBSEQUENT EVENTS On July 4, 2025, the One Big Beautiful Bill Act “(OBBBA”) was signed into law, which includes federal tax law revisions that may affect the Company’s ability to utilize certain tax attributes. The Company is currently evaluating the impact of these changes. On July 16, 2025, we sold three funeral homes and one cemetery that was included in held for sale at June 30, 2025, for an aggregate of $ 5.5 million. 30 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 acquisitions and 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 or divestitures. 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 frameworks; • 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; 31 • changes in federal income tax laws and regulations and the implementation and interpretation of these laws and regulations by the Internal Revenue Service, including changes and potential impacts, if any, resulting from the recently enacted One Big Beautiful Bill Act; • 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 on commercially reasonable terms and on a timely basis, if at all, and successfully integrate acquired businesses with our existing businesses, including expected performance and financial improvements related thereto; • our ability to successfully complete any non-core asset divestitures on commercially reasonable terms and o a timely basis, if at all, and the impact of any such divestitures on our Company, including any financial, operational, tax or other similar impacts 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. 32