CARRIAGE SERVICES INC 10-Q

Item 1. Financial Statements. CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except share data) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,248 $ 1,165 Accounts receivable, net 37,515 30,193 Inventories 7,556 7,920 Prepaid and other current assets 4,396 4,123 Current assets held for sale 98 1,135 Total current assets 50,813 44,536 Preneed cemetery trust investments 102,011 98,120 Preneed funeral trust investments 121,849 106,219 Preneed cemetery receivables, net 63,312 50,958 Receivables from preneed funeral trusts, net 16,403 22,372 Property, plant, and equipment, net 284,480 273,004 Cemetery property, net 116,555 109,576 Goodwill 433,484 414,859 Intangible and other non-current assets, net 42,687 40,427 Operating lease right-of-use assets 12,946 14,953 Cemetery perpetual care trust investments 93,154 85,103 Non-current assets held for sale 5,056 19,453 Total assets $ 1,342,750 $ 1,279,580 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt and lease obligations $ 4,181 $ 3,914 Accounts payable 17,247 15,427 Accrued and other liabilities 35,962 38,460 Current liabilities held for sale 144 240 Total current liabilities 57,534 58,041 Acquisition debt, net of current portion 6,069 4,895 Long-term liabilities held for sale 4,725 13,842 Credit facility 133,546 135,382 Senior notes 397,136 396,597 Obligations under finance leases, net of current portion 9,046 6,045 Obligations under operating leases, net of current portion 11,941 14,035 Deferred preneed cemetery revenue 75,821 61,767 Deferred preneed funeral revenue 38,566 39,261 Deferred tax liability 54,251 51,429 Other long-term liabilities 1,482 1,179 Deferred preneed cemetery receipts held in trust 102,011 98,120 Deferred preneed funeral receipts held in trust 117,155 106,219 Care trusts’ corpus 91,383 84,218 Total liabilities 1,100,666 1,071,030 Commitments and contingencies: Stockholders’ equity: Common stock, $ 0.01 par value; 80,000,000 shares authorized and 27,373,011 and 26,881,355 shares issued, respectively and 15,745,193 and 15,253,537 shares outstanding, respectively 274 269 Additional paid-in capital 238,119 243,825 Retained earnings 282,444 243,209 Treasury stock, at cost; 11,627,818 shares ( 278,753 ) ( 278,753 ) Total stockholders’ equity 242,084 208,550 Total liabilities and stockholders’ equity $ 1,342,750 $ 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue: Service revenue $ 44,204 $ 44,916 $ 143,724 $ 139,048 Property and merchandise revenue 48,633 47,419 140,732 142,511 Other revenue 9,905 8,352 27,502 24,939 102,742 100,687 311,958 306,498 Field costs and expenses: Cost of service 22,851 22,739 71,215 68,119 Cost of merchandise 31,919 31,492 96,684 95,423 Cemetery property amortization 2,755 1,957 6,824 6,273 Field depreciation expense 3,226 3,411 9,836 10,283 Regional and unallocated funeral and cemetery costs 4,095 4,085 12,590 12,172 Other expenses 1,653 1,513 4,789 4,483 66,499 65,197 201,938 196,753 Gross profit 36,243 35,490 110,020 109,745 Corporate costs and expenses: General, administrative, and other 12,177 12,206 36,163 47,047 Net loss on divestitures and impairment charges 6,559 387 788 1,955 Operating income 17,507 22,897 73,069 60,743 Interest expense 6,946 8,035 21,278 25,071 Net gain on property damage, net of insurance claims — — — ( 417 ) Other, net 852 13 ( 1,029 ) 59 Income before income taxes 9,709 14,849 52,820 36,030 Expense for income taxes 3,431 4,930 16,882 11,962 (Benefit) expense related to discrete income tax items ( 292 ) 53 ( 3,297 ) 970 Total expense for income taxes 3,139 4,983 13,585 12,932 Net income $ 6,570 $ 9,866 $ 39,235 $ 23,098 Basic earnings per common share: $ 0.42 $ 0.65 $ 2.51 $ 1.52 Diluted earnings per common share: $ 0.41 $ 0.63 $ 2.47 $ 1.48 Dividends declared per common share: $ 0.1125 $ 0.1125 $ 0.3375 $ 0.3375 Weighted average number of common and common equivalent shares outstanding: Basic 15,490 15,011 15,398 14,951 Diluted 15,732 15,491 15,601 15,400 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) Nine months ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 39,235 $ 23,098 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,077 17,274 Provision for credit losses 2,753 2,303 Stock-based compensation expense 5,857 4,521 Deferred income tax (benefit) expense 3,308 ( 1,838 ) Amortization of intangibles 926 1,012 Amortization of debt issuance costs 384 495 Amortization and accretion of debt 420 402 Net loss on divestitures and impairment charges 788 1,955 Net gain on property damage, net of insurance claims — ( 417 ) Net gain on sale of excess real property ( 1,047 ) — Changes in operating assets and liabilities that provided (used) cash: Accounts and preneed receivables ( 18,405 ) ( 20,880 ) Inventories, prepaid, and other current assets 203 1,543 Intangible and other non-current assets ( 2,100 ) ( 3,624 ) Preneed funeral and cemetery trust investments ( 16,796 ) ( 6,367 ) Accounts payable ( 3,477 ) 3,189 Accrued and other liabilities ( 1,493 ) 5,909 Deferred preneed funeral and cemetery revenue 623 7,546 Deferred preneed funeral and cemetery receipts held in trust 17,312 6,595 Net cash provided by operating activities 46,568 42,716 Cash flows from investing activities: Acquisitions of businesses and real property ( 56,499 ) — Proceeds from divestitures and sale of other assets 37,310 12,015 Proceeds from insurance claims — 403 Capital expenditures ( 12,715 ) ( 11,710 ) Net cash (used in) provided by investing activities ( 31,904 ) 708 Cash flows from financing activities: Borrowings from the credit facility 113,800 32,100 Payments against the credit facility ( 115,900 ) ( 71,200 ) Payment of debt issuance costs for the credit facility — ( 782 ) Payments on acquisition debt and obligations under finance leases ( 427 ) ( 464 ) Proceeds from the exercise of stock options and employee stock purchase plan contributions 1,476 2,181 Taxes paid on restricted stock, performance award vestings, and exercise of stock options ( 8,276 ) ( 424 ) Dividends paid on common stock ( 5,254 ) ( 5,098 ) Net cash used in financing activities ( 14,581 ) ( 43,687 ) Net increase (decrease) in cash and cash equivalents 83 ( 263 ) Cash and cash equivalents at beginning of period 1,165 1,523 Cash and cash equivalents at end of period $ 1,248 $ 1,260 Supplemental disclosure of cash flow information: Cash paid for interest and financing costs $ 15,840 $ 19,729 Cash paid for taxes 10,820 13,434 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 September 30, 2025 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - June 30, 2025 15,701 $ 273 $ 238,026 $ 275,874 $ ( 278,753 ) $ 235,420 Net income — — — 6,570 — 6,570 Issuance of common stock from employee stock purchase plan 7 — 229 — — 229 Issuance of common stock to directors and board advisor 2 — 63 — — 63 Exercise of stock options 53 1 263 — — 264 Restricted common stock, performance awards and stock options surrendered for taxes paid ( 18 ) — ( 645 ) — — ( 645 ) Stock-based compensation expense — — 1,949 — — 1,949 Dividends on common stock ($ 0.1125 per share) — — ( 1,766 ) — — ( 1,766 ) Balance - September 30, 2025 15,745 $ 274 $ 238,119 $ 282,444 $ ( 278,753 ) $ 242,084 Three months ended September 30, 2024 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - June 30, 2024 15,236 $ 269 $ 242,883 $ 223,488 $ ( 278,753 ) $ 187,887 Net income — — — 9,866 — 9,866 Issuance of common stock from employee stock purchase plan 11 — 239 — — 239 Issuance of common stock to directors and board advisor 4 — 136 — — 136 Exercise of stock options 1 — — — — — Restricted common stock and stock options surrendered for taxes paid ( 29 ) — ( 5 ) — — ( 5 ) Stock-based compensation expense — — 1,714 — — 1,714 Dividends on common stock ($ 0.1125 per share) — — ( 1,708 ) — — ( 1,708 ) Balance - September 30, 2024 15,223 $ 269 $ 243,259 $ 233,354 $ ( 278,753 ) $ 198,129 6 Nine months ended September 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 — — — 39,235 — 39,235 Issuance of common stock from employee stock purchase plan 27 — 891 — — 891 Issuance of common stock to directors and board advisor 5 — 203 — — 203 Issuance of common stock 271 3 ( 3 ) — — — Issuance of restricted common stock 115 1 ( 1 ) — — — Exercise of stock options 132 1 584 — — 585 Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 71 ) — ( 8,276 ) — — ( 8,276 ) Stock-based compensation expense — — 5,654 — — 5,654 Dividends on common stock ($ 0.3375 per share) — — ( 5,254 ) — — ( 5,254 ) Other 12 — 496 — — 496 Balance - September 30, 2025 15,745 $ 274 $ 238,119 $ 282,444 $ ( 278,753 ) $ 242,084 Nine months ended September 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 — — — 23,098 — 23,098 Issuance of common stock from employee stock purchase plan 42 — 910 — — 910 Issuance of common stock to directors and board advisor 14 — 400 — — 400 Issuance of restricted common stock 157 2 ( 2 ) — — — Exercise of stock options 51 1 1,271 — — 1,272 Restricted common stock and stock options surrendered for taxes paid ( 72 ) — ( 424 ) — — ( 424 ) Stock-based compensation expense — — 4,121 — — 4,121 Dividends on common stock ($ 0.3375 per share) — — ( 5,098 ) — — ( 5,098 ) Other 31 — 790 — — 790 Balance - September 30, 2024 15,223 $ 269 $ 243,259 $ 233,354 $ ( 278,753 ) $ 198,129 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 September 30, 2025, we operated 159 funeral homes in 24 states and 28 cemeteries in 9 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 September 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): September 30, 2025 December 31, 2024 Accounts receivable, net $ 81 $ 833 Inventories 17 302 Current assets held for sale $ 98 $ 1,135 Preneed cemetery trust investments $ — $ 4,876 Preneed funeral trust investments — 2,197 Preneed cemetery receivables, net — 1,671 Receivables from funeral preneed trusts, net 4,695 — Property, plant, and equipment, net 322 4,898 Cemetery property, net — 3,362 Intangible and other non-current assets, net — 215 Operating lease right-of-use assets 39 — Cemetery perpetual care trust investments — 2,234 Non-current assets held for sale $ 5,056 $ 19,453 Current portion of operating lease obligations $ 9 $ — Accounts payable 51 94 Accrued and other liabilities 84 146 Current liabilities held for sale $ 144 $ 240 Obligations under operating leases, net of current portion $ 30 $ — Deferred preneed cemetery revenue — 3,517 Deferred preneed funeral revenue 4,695 1,018 Deferred preneed cemetery receipts held in trust — 4,876 Deferred preneed funeral receipts held in trust — 2,197 Care trusts’ corpus — 2,234 Long-term liabilities held for sale $ 4,725 $ 13,842 Goodwill The excess of the purchase price over the fair value of identifiable net assets of funeral home businesses and cemeteries we acquire is recorded as goodwill. Goodwill has an indefinite life and is not subject to amortization. As such, we test goodwill for impairment on an annual basis as of August 31st each year. Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. We performed our most recent annual goodwill impairment test as of August 31, 2025. We intend to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years. We conducted qualitative assessments in 2023 and 2024; however, we performed a quantitative assessment in 2025. No goodwill impairment was recorded as a result of our assessments. In addition to our annual test, we assess the impairment of goodwill whenever events or changes in circumstances indicate that the carrying value of a reporting unit may be greater than fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant negative industry or economic trends and significant adverse changes in the business climate, which may be indicated by a decline in our market capitalization or decline in operating results. Our quantitative goodwill impairment test involves estimates and management judgment. In the quantitative analysis, we compare the fair value of each reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, the goodwill of that reporting unit is not considered impaired. We determine fair value for each reporting unit using an income approach, weighted 80%, and two market approaches, weighted 10% each. Our methodology for determining an income-based fair value is based on discounting projected future cash flows. The projected future cash flows include assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows discounted at our weighted average cost of capital based on market participant assumptions. Our first methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) of comparable companies operating in the same industry as the individual reporting units. Our second market approach methodology utilizes the guideline transaction method, in which transaction multiples are derived from acquisitions of controlling interests in companies engaged in the same or similar lines of business as the reporting units. In accordance with the guidance, if the fair value of the reporting unit is less than its carrying amount an impairment charge is recorded in an amount equal to the difference. When we divest a portion of a reporting unit that constitutes a business in accordance with United States generally accepted accounting principles (“GAAP”), we allocate goodwill associated with that business to be included in the gain or loss on divestiture. The goodwill allocated is based on the relative fair value of the business being divested and the portion of the reporting unit that will be retained. Additionally, after each divestiture, we will test the goodwill remaining in the portion of the reporting unit to be retained for impairment using a qualitative assessment unless we deem a quantitative assessment to be appropriate to ensure the fair value of our reporting units is greater than their carrying value. For the nine months ended September 30, 2025 and 2024, after each divestiture, we concluded that it was more-likely-than not that the fair value of our reporting units was greater than their carrying value and thus there was no impairment to goodwill. See Note 4 to the Condensed Consolidated Financial Statements included herein for additional information related to our goodwill. Intangible Assets Our intangible assets include tradenames resulting from acquisitions and are included in Intangible and other non-current assets , net on our Condensed Consolidated Balance Sheets. Our tradenames are considered to have an indefinite life and are not subject to amortization. As such, we test our intangible assets for impairment on an annual basis as of August 31st each year. Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of the tradename is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test. We performed our most recent annual intangible assets impairment test as of August 31, 2025. We intend to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years. We conducted qualitative assessments in 2023 and 2024; however, we performed a quantitative assessment in 2025. In addition to our intangible assets annual test, we assess the impairment of intangible assets whenever certain events or changes in circumstances indicate that the carrying value of the intangible asset may be greater than the fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results and significant negative industry or economic trends. Our quantitative intangible asset impairment test involves estimates and management judgment. Our quantitative analysis is performed using the relief from royalty method, which measures the tradenames by determining the value of the royalties that we are relieved from paying due to our ownership of the asset. We determine the fair value of the asset by discounting the cash flows that represent a savings in lieu of paying a royalty fee for use of the tradename. The discounted cash flow valuation uses projections of future cash flows and includes assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows and the determination and application of an appropriate royalty rate and discount rate. To estimate the royalty rates for the individual tradename, we mainly rely on the profit split method, but also consider the comparable third-party license agreements and the return on asset method. A scorecard is used to assess the relative strength of the individual tradename to further adjust the royalty rates selected under the profit-split method for qualitative factors. In accordance with the guidance, if the fair value of the tradename is less than its carrying amount, then an impairment charge is recorded in an amount equal to the difference. Our 2025 quantitative assessment did no t indicate any impairment to intangible assets as a result of our testing. As a result of our 2024 qualitative assessment, we determined that there were factors that would indicate the need to perform additional quantitative impairment tests for certain funeral home businesses. As a result of these additional quantitative impairment tests, we recorded an impairment to the tradenames for certain funeral home businesses of $ 0.6 million, during the nine months ended September 30, 2024, as the carrying amount of these tradenames exceeded their fair value. 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Property, Plant, and Equipment Property, plant, and equipment is comprised of the following (in thousands): September 30, 2025 December 31, 2024 Land $ 92,739 $ 86,609 Buildings and improvements 266,089 265,231 Furniture, equipment and vehicles 69,244 72,052 Property, plant, and equipment, at cost 428,072 423,892 Less: accumulated depreciation ( 143,270 ) ( 145,990 ) Property, plant, and equipment, net $ 284,802 $ 277,902 Less: Held for sale ( 322 ) ( 4,898 ) Property, plant, and equipment, net $ 284,480 $ 273,004 During the nine months ended September 30, 2025, we acquired $23.3 million of property, plant and equipment related to our business combinations, described in Note 3 to the Consolidated Financial Statements. We sold nine funeral homes and four cemeteries that had a carrying value of property, plant, and equipment of $ 10.7 million, and we sold real property for $ 4.1 million, with a carrying value of $ 2.6 million, resulting in a $ 1.1 million gain on the sale. The impacts of these transactions are recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operation and more fully described in Note 5 to the Condensed Consolidated Financial Statements. We also recognized an impairment of $ 1.6 million for the three months ended September 30, 2025 on assets classified as held for sale. During the nine months ended September 30, 2024, we sold six funeral homes and one cemetery that had a carrying value of property, plant, and equipment of $ 3.1 million, which was included in the loss on sale and recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations. Additionally, we sold real property for $ 1.1 million, with a carrying value of $ 0.8 million and we recognized an impairment related to property, plant and equipment for assets held for sale of $ 40 thousand, which was recorded in Net loss on divestitures and impairment charges on our Consolidated Statement of Operations. Our growth and maintenance capital expenditures totaled $ 2.2 million and $ 3.0 million for the three months ended September 30, 2025 and 2024, respectively, and $ 5.2 million and $ 6.4 million for the nine months ended September 30, 2025 and 2024, respectively. In addition, we recorded depreciation expense of $ 3.2 million and $ 3.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 10.0 million and $ 10.7 million for the nine months ended September 30, 2025 and 2024, respectively. Cemetery Property When we acquire a cemetery, we utilize an internal and external approach to determine the fair value of the cemetery property. From an external perspective, we obtain an accredited appraisal to provide reasonable assurance for property existence, property availability (unrestricted) for development, property lines, available spaces to sell, identifiable obstacles or easements and general valuation inclusive of known variables in that market. From an internal perspective, we conduct a detailed analysis of the acquired cemetery property using other cemeteries in our portfolio as a benchmark. This provides the added benefit of relevant data that is not available to third party appraisers. Through this thorough internal process, we are able to identify viable costs of property based on historical experience, particular markets and demographics, reasonable margins, practical retail prices, and park infrastructure and condition. Cemetery property was $ 116.6 million and $ 112.9 million, net of accumulated amortization of $ 76.3 million and $ 72.6 million at September 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 $ 4.5 million and $ 1.7 million for the three months ended September 30, 2025 and 2024, respectively, and $ 7.5 million and $ 5.3 million for the nine months ended September 30, 2025 and 2024, respectively. We recorded amortization expense for cemetery interment rights of $ 2.8 million and $ 2.0 million for the three months ended September 30, 2025 and 2024, respectively, and $ 6.8 million and $ 6.3 million for the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, we sold four cemeteries that had a carrying value of cemetery property of $ 3.4 million, which was included in the gain on sale and recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations, more fully described in Note 5 to the Condensed Consolidated Financial Statements. 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) During the nine months ended September 30, 2024, we sold one cemetery that had a carrying value of cemetery property of $ 0.8 million, which was included in the loss on sale and recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations. Income Taxes Income tax expense was $ 3.1 million and $ 5.0 million for the three months ended September 30, 2025 and 2024, respectively, and $ 13.6 million and $ 12.9 million for the nine months ended September 30, 2025 and 2024, respectively. Our operating tax rate before discrete items was 35.3 % and 33.2 % for the three months ended September 30, 2025 and 2024, respectively, and 32.0 % and 33.2 % for the nine months ended September 30, 2025 and 2024, respectively. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA made several key provisions of the Tax Cuts and Jobs Act of 2017 permanent, including 100% bonus depreciation, the immediate expensing of domestic research costs, and the introduction of a favorable modification to the business interest expense limitation. Together, these changes accelerate the timing of certain tax deductions in the current period that allow for reductions in cash taxes. The Company has completed its assessment of the legislation’s impact and determined that it did not have a material effect on the Company's annualized effective tax rate. 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. 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. Internal-Use Software In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. Under the new guidance, costs associated with software developed for internal use will now be capitalized when management authorizes a project and when it is probable the project will be completed and used to perform the function intended, rather than when a project reaches the application development stage under existing guidance. The guidance is effective beginning January 1, 2028, with early adoption permitted, and can be applied prospectively, retrospectively, or on a modified retrospective basis. We have not determined the transition method, timing for adoption, or estimated the effect on our condensed consolidated financial statements. 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 3. BUSINESS COMBINATIONS On September 9, 2025, we acquired a business consisting of six funeral homes, one cemetery, and one cremation focused business in the Orlando, FL area for approximately $ 49.0 million. The purchase price consisted of $ 47.0 million in cash at closing and $ 2.0 million of deferred purchase price payments. The net present value of such future deferred purchase price payments was $ 1.3 million. We acquired substantially all of the assets and assumed certain operating liabilities of these businesses. On September 17, 2025, we acquired a business consisting of two funeral homes in the Pensacola, FL area for $ 9.5 million in cash. We acquired substantially all of the assets and assumed certain operating liabilities of this business. The primary reasons for the acquisitions that contributed to the recognition of goodwill include enhancement of our footprint in strategic markets and the addition of deferred revenue that will enhance our long-term stability. The pro forma impact of these acquisitions on prior periods is not presented, as the impact is not significant to our reported results. The results of the acquired businesses are reflected in our Consolidated Statements of Operations from the date of acquisition. The following table summarizes the breakdown of the preliminary purchase price allocation for the businesses described above (in thousands): Preliminary Purchase Price Allocation Current assets $ 3,329 Preneed trust assets 4,068 Property, plant, and equipment 23,315 Cemetery property 2,733 Goodwill 37,233 Intangible and other non-current assets 3,708 Assumed liabilities ( 1,293 ) Preneed trust liabilities ( 4,068 ) Deferred revenue ( 12,526 ) Purchase price $ 56,499 The purchase accounting is preliminary as we have not finalized our assessment of the fair value because there has been insufficient time between the acquisition date and the issuance of these financial statements to complete our review and the final determination of fair value. We are also currently reviewing the allocation of goodwill between segments. We did not acquire any businesses during the nine months ended September 30, 2024. 4. GOODWILL Many of the former owners and staff of our acquired funeral home and cemetery businesses have provided high quality service to families for generations, which often represents a substantial portion of the value of a business. The excess of the purchase price over the fair value of identifiable net assets of acquired funeral home and cemetery businesses is recorded as goodwill. The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands): September 30, 2025 December 31, 2024 Goodwill at the beginning of the period $ 414,859 $ 423,643 Increase in goodwill related to acquisitions 37,233 — Decrease in goodwill related to divestitures ( 18,608 ) ( 8,784 ) Goodwill at the end of the period $ 433,484 $ 414,859 During the nine months ended September 30, 2025, we allocated $ 18.6 million of goodwill to the sale of nine funeral homes and four cemeteries which was recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations, of which $ 16.9 million was allocated to our funeral home segment and $ 1.7 million was allocated to our cemetery segment. During the nine months ended September 30, 2024, we allocated $ 8.8 million of goodwill to the sale of six funeral homes and one cemetery which was recorded in Net loss on divestitures 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. 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. DIVESTED OPERATIONS During the three months ended September 30, 2025, we sold seven funeral homes and one cemetery for an aggregate of $ 18.0 million. During the nine months ended September 30, 2025, we sold nine funeral homes and four cemeteries for an aggregate of $ 33.8 million and merged one funeral home with another business we own in an existing market. During the three months ended September 30, 2024, we merged two funeral homes with other businesses we own in existing markets. During the nine months ended September 30, 2024, we sold six funeral homes and one cemetery for an aggregate of $ 10.9 million and merged three funeral homes with other businesses we own in existing markets. 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 September 30, Nine months ended, September 30, 2025 2024 2025 2024 Revenue $ 1,401 $ 25 $ 7,849 $ 1,383 Operating income 220 ( 154 ) 1,717 42 Gain (loss) on divestitures (1) ( 6,854 ) 295 2,125 ( 1,214 ) Income tax (expense) benefit 2,120 ( 47 ) ( 1,228 ) 389 Net gain (loss) from divested operations, after tax $ ( 4,514 ) $ 94 $ 2,614 $ ( 783 ) (1) Net loss on divestitures is recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations. 6. 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): September 30, 2025 Column1 Funeral Cemetery Corporate Held for Sale Total Trade and financed receivables $ 6,695 $ 30,128 $ — $ ( 81 ) $ 36,742 Other receivables 834 2,058 1,367 — 4,259 Allowance for credit losses ( 325 ) ( 3,160 ) — — ( 3,485 ) Accounts receivable, net $ 7,204 $ 29,026 $ 1,367 $ ( 81 ) $ 37,516 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. 14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes the activity in our allowance for credit losses by portfolio segment for the nine months ended September 30, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs Recoveries September 30, 2025 Trade and financed receivables: Funeral $ ( 302 ) $ ( 812 ) $ 1,396 $ ( 607 ) $ ( 325 ) Cemetery ( 1,014 ) ( 764 ) ( 1,382 ) — ( 3,160 ) Total allowance for credit losses on trade and financed receivables $ ( 1,316 ) $ ( 1,576 ) $ 14 $ ( 607 ) $ ( 3,485 ) Balances due on undelivered preneed funeral trust contracts have been reclassified to reduce Deferred preneed funeral revenue on our Consolidated Balance Sheets of $ 8.6 million and $ 10.2 million at September 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): September 30, 2025 December 31, 2024 Interment rights $ 95,497 $ 79,436 Merchandise and services 16,442 13,128 Unearned finance charges 5,099 4,983 Cemetery receivables $ 117,038 $ 97,547 The components of our cemetery receivables are as follows (in thousands): September 30, 2025 December 31, 2024 Cemetery receivables $ 117,038 $ 97,547 Less: unearned finance charges ( 5,099 ) ( 4,983 ) Cemetery receivables, at amortized cost $ 111,939 $ 92,564 Less: allowance for contract cancellation and credit losses ( 5,526 ) ( 3,018 ) Less: balances due on undelivered cemetery preneed contracts ( 16,133 ) ( 13,576 ) Less: amounts in accounts receivable ( 26,968 ) ( 23,341 ) Preneed cemetery receivables, net including HFS $ 63,312 $ 52,629 Less: Held for sale — ( 1,671 ) Preneed cemetery receivables, net $ 63,312 $ 50,958 The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the nine months ended September 30, 2025 (in thousands): January 1, 2025 Provision for Credit Losses Write Offs September 30, 2025 Total allowance for credit losses on Preneed cemetery receivables, net $ ( 2,004 ) $ ( 1,177 ) $ 815 $ ( 2,366 ) The amortized cost basis of our cemetery receivables by year of origination as of September 30, 2025 is as follows (in thousands): 2025 2024 2023 2022 2021 Prior Total Total cemetery receivables, at amortized cost $ 48,511 $ 35,804 $ 15,566 $ 8,101 $ 2,830 $ 1,127 $ 111,939 The aging of past due cemetery receivables as of September 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 $ 1,824 $ 1,501 $ 553 $ 5,334 $ 9,212 $ 86,594 $ 95,806 Deferred revenue 226 272 117 2,127 2,742 18,490 21,232 Total contracts $ 2,050 $ 1,773 $ 670 $ 7,461 $ 11,954 $ 105,084 $ 117,038 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 16.1 million and $ 13.6 million at September 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. 7. 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 September 30, 2025, the carrying value and fair value of our Credit Facility was $ 134.9 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 September 30, 2025, the carrying value of our acquisition debt was $ 6.7 million, which approximated its fair value. The fair value of our Senior Notes was $ 378.4 million at September 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 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 September 30, 2025 because the investments include restrictions that do not allow for liquidation until 2027. As of September 30, 2025, we do not have an unfunded commitment for this investment. Furthermore, we have six 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 44 % 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 56 % of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions. As of September 30, 2025, we had approximately $21.8 million in 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 8 and 9 to our Condensed Consolidated Financial Statements for the fair value hierarchy levels of our trust investments. 16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. 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. 17 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): September 30, 2025 December 31, 2024 Preneed cemetery trust investments, at market value $ 105,177 $ 106,143 Less: allowance for contract cancellation ( 3,166 ) ( 3,147 ) Preneed cemetery trust investments $ 102,011 $ 102,996 Less: Held for sale — ( 4,876 ) Preneed cemetery trust investments $ 102,011 $ 98,120 The cost and market values associated with preneed cemetery trust investments at September 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 $ 15,487 $ — $ — $ 15,487 Fixed income securities: U.S. agency obligations 2 526 — ( 25 ) 501 Foreign debt 2 — — — — Corporate debt 2 — — — — Preferred stock 2 — — — — Certificates of deposit 2 79 — ( 4 ) 75 Common stock 1 11,842 727 ( 1,653 ) 10,916 Limited partnership fund 3,575 — ( 162 ) 3,413 Mutual funds: Equity 1 3,053 — ( 59 ) 2,994 Fixed income 2 43,123 459 ( 10 ) 43,572 Alternative investments 27,854 313 ( 54 ) 28,113 Trust securities $ 105,539 $ 1,499 $ ( 1,967 ) $ 105,071 Accrued investment income $ 106 $ 106 Preneed cemetery trust investments $ 105,177 Market value as a percentage of cost 99.6 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ 75 Due in one to five years 332 Due in five to ten years 169 Thereafter — Total fixed income securities $ 576 18 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 September 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): September 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 $ — $ — $ 501 $ ( 25 ) $ 501 $ ( 25 ) Foreign debt — — — — — — Corporate debt — — — — — — Preferred stock — — — — — — Certificates of deposit — — 75 ( 4 ) 75 ( 4 ) Total fixed income securities with an unrealized loss $ — $ — $ 576 $ ( 29 ) $ 576 $ ( 29 ) 19 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Investment income $ 626 $ 647 $ 2,043 $ 2,030 Realized gains 1,807 — 10,009 11,500 Realized losses ( 656 ) — ( 7,753 ) ( 8,511 ) Unrealized gains (losses), net ( 437 ) 2,151 ( 468 ) ( 2,785 ) Expenses and taxes ( 557 ) ( 365 ) ( 1,366 ) ( 1,704 ) Net change in deferred preneed cemetery receipts held in trust ( 783 ) ( 2,433 ) ( 2,465 ) ( 530 ) $ — $ — $ — $ — Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Purchases $ ( 19,372 ) $ — $ ( 61,050 ) $ ( 11,110 ) Sales 19,955 — 67,957 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): September 30, 2025 December 31, 2024 Preneed funeral trust investments, at market value $ 125,533 $ 111,721 Less: allowance for contract cancellation ( 3,684 ) ( 3,305 ) Preneed funeral trust investments $ 121,849 $ 108,416 Less: Held for sale — ( 2,197 ) Preneed funeral trust investments $ 121,849 $ 106,219 20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The cost and market values associated with preneed funeral trust investments at September 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 $ 25,879 $ — $ — $ 25,879 Fixed income securities: U.S agency obligations 2 305 — ( 19 ) 286 Foreign debt 2 — — — — Corporate debt 2 192 4 — 196 Common stock 1 16,077 3,245 ( 1,775 ) 17,547 Limited partnership fund 3,270 — ( 148 ) 3,122 Mutual funds: Equity 1 7,454 1,366 ( 87 ) 8,733 Fixed income 2 42,400 393 ( 589 ) 42,204 Other investments 2 1,765 — — 1,765 Alternative investments 25,475 286 ( 50 ) 25,711 Trust securities $ 122,817 $ 5,294 $ ( 2,668 ) $ 125,443 Accrued investment income $ 90 $ 90 Preneed cemetery trust investments $ 125,533 Market value as a percentage of cost 102.1 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ 50 Due in one to five years 333 Due in five to ten years 99 Thereafter — Total fixed income securities $ 482 21 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 September 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): September 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 $ — $ — $ 286 $ ( 19 ) $ 286 $ ( 19 ) Foreign debt — — — — — — Corporate debt — — — — — — Preferred stock — — — — — — Total fixed income securities with an unrealized loss $ — $ — $ 286 $ ( 19 ) $ 286 $ ( 19 ) 22 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Investment income $ 491 $ 486 1,485 1,597 Realized gains 1,652 — 9,100 10,626 Realized losses ( 383 ) — ( 6,611 ) ( 7,504 ) Unrealized gains (losses), net 2,415 1,638 2,626 ( 2,337 ) Expenses and taxes ( 347 ) ( 213 ) ( 817 ) ( 880 ) Net change in deferred preneed funeral receipts held in trust ( 3,827 ) ( 1,911 ) ( 5,782 ) ( 1,502 ) $ — $ — $ — $ — Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Purchases $ ( 16,839 ) $ — ( 53,294 ) ( 10,214 ) Sales 18,013 — 60,470 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): September 30, 2025 December 31, 2024 Cemetery perpetual care trust investments, at market value $ 93,154 $ 87,337 Obligations due to (due from) trust ( 1,771 ) ( 885 ) Care trusts’ corpus, including HFS $ 91,383 $ 86,452 Less: Held for sale — ( 2,234 ) Care trusts' corpus $ 91,383 $ 84,218 23 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 September 30, 2025 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 8,123 $ — $ — $ 8,123 Fixed income securities: Foreign debt 2 — — — — Corporate debt 2 94 2 — 96 Preferred stock 2 — — — — Common stock 1 11,381 1,017 ( 1,494 ) 10,904 Limited partnership fund 3,155 — ( 143 ) 3,012 Mutual funds: Equity 1 4,088 263 ( 76 ) 4,275 Fixed income 2 41,518 428 ( 112 ) 41,834 Alternative investments 24,581 276 ( 48 ) 24,809 Trust securities $ 92,940 $ 1,986 $ ( 1,873 ) $ 93,053 Accrued investment income $ 101 $ 101 Preneed cemetery trust investments $ 93,154 Market value as a percentage of cost 100.1 % The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ 25 Due in one to five years 71 Due in five to ten years — Thereafter — Total fixed income securities $ 96 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 % 24 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 September 30, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): September 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 — — — — — — Preferred stock — — — — — — Total fixed income securities with an unrealized loss $ — $ — $ — $ — $ — $ — 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Realized gains $ 298 $ — 1,577 1,419 Realized losses ( 533 ) — $ ( 1,962 ) $ ( 1,089 ) Unrealized gains (losses), net 325 1,676 112 ( 2,553 ) Net change in care trusts’ corpus ( 89 ) ( 1,676 ) 274 2,223 $ — $ — $ — $ — Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Investment income $ 2,549 $ 3,820 $ 7,456 $ 10,444 Realized losses 87 ( 1,087 ) ( 1,172 ) ( 2,212 ) Total $ 2,636 $ 2,733 $ 6,284 $ 8,232 Purchases and sales of investments in the perpetual care trusts are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Purchases $ ( 17,798 ) $ — $ ( 56,694 ) $ ( 9,113 ) Sales 18,109 — $ 61,040 $ 19,130 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 9. 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): September 30, 2025 December 31, 2024 Preneed funeral trust funds, at cost $ 21,749 $ 23,063 Less: allowance for contract cancellation ( 651 ) ( 691 ) Receivables from preneed funeral trusts, net including HFS $ 21,098 $ 22,372 Less: Held for sale ( 4,695 ) — Receivables from preneed funeral trusts, net $ 16,403 $ 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 September 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 September 30, 2025, is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 6,912 $ 6,912 Fixed income investments 11,432 11,432 Mutual funds and common stocks 3,402 3,270 Annuities 4 4 Total $ 21,749 $ 21,617 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 10. CREDIT FACILITY AND ACQUISITION DEBT At September 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 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 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) 26 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 September 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 September 30, 2025. Our Credit Facility and acquisition debt consisted of the following (in thousands): September 30, 2025 December 31, 2024 Credit Facility $ 134,900 $ 137,000 Debt issuance costs, net of accumulated amortization of $ 3,212 and $ 2,947 , respectively ( 1,354 ) ( 1,618 ) Total Credit Facility $ 133,546 $ 135,382 Acquisition debt $ 6,671 $ 5,466 Less: current portion ( 602 ) ( 571 ) Total acquisition debt, net of current portion $ 6,069 $ 4,895 At September 30, 2025, we had outstanding borrowings under the Credit Facility of $ 134.9 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 September 30, 2025, we had $ 112.9 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Credit Facility interest expense 2,089 3,230 $ 6,690 $ 10,669 Credit Facility amortization of debt issuance costs 88 105 265 381 At September 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 September 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 6.7 % and 8.5 % for the three months ended September 30, 2025 and 2024, respectively, and 6.8 % and 8.7 % for the nine months ended September 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 8.5 %. 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Acquisition debt imputed interest expense $ 93 $ 102 280 309 27 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): September 30, 2025 December 31, 2024 Principal amount $ 400,000 $ 400,000 Debt discount, net of accumulated amortization of $ 2,268 and $ 1,848 , respectively ( 2,232 ) ( 2,652 ) Debt issuance costs, net of accumulated amortization of $ 645 and $ 526 , respectively ( 632 ) ( 751 ) Carrying value of the Senior Notes $ 397,136 $ 396,597 At September 30, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $ 378.4 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Senior Notes interest expense 4,250 4,250 $ 12,750 $ 12,750 Senior Notes amortization of debt discount 142 135 420 402 Senior Notes amortization of debt issuance costs 40 38 119 114 The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 44 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 nine months ended September 30, 2025 and 2024 were 4.42 % and 4.30 %, respectively. 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 12. 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Numerator for basic and diluted earnings per share: Net income $ 6,570 $ 9,866 $ 39,235 $ 23,098 Less: Earnings allocated to unvested restricted stock ( 96 ) ( 127 ) ( 591 ) ( 304 ) Income attributable to common stockholders $ 6,474 $ 9,739 $ 38,644 $ 22,794 Denominator: Denominator for basic earnings per common share – weighted average shares outstanding 15,490 15,011 15,398 14,951 Effect of dilutive securities: Stock options 242 64 203 33 Performance awards — 416 — 416 Denominator for diluted earnings per common share – weighted average shares outstanding 15,732 15,491 15,601 15,400 Basic earnings per common share: $ 0.42 $ 0.65 $ 2.51 $ 1.52 Diluted earnings per common share: $ 0.41 $ 0.63 $ 2.47 $ 1.48 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Antidilutive stock options 222 1,070 224 1,192 29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 13. 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 nine months ended September 30, 2025 and 2024, respectively: Three months ended September 30, 2025 Funeral Cemetery Corporate Total Revenue Services $ 39,238 $ 4,966 $ — $ 44,204 Merchandise 17,967 4,573 — 22,540 Cemetery property — 26,093 — 26,093 Other revenue 5,573 4,332 — 9,905 Total revenue 62,778 39,964 — 102,742 Less: Salaries, benefits, and commission expenses 16,849 10,426 — 27,275 Cost of merchandise 6,356 3,380 — 9,736 Allocated overhead costs (1) 3,301 1,340 — 4,641 Facilities and grounds expenses 2,868 1,983 — 4,851 General and administrative expenses (2) 2,518 977 — 3,495 Other segment expenses (3) 18,271 4,789 12,177 35,237 Operating income (loss) $ 12,615 $ 17,069 $ ( 12,177 ) $ 17,507 Interest expense $ 330 $ 7 $ 6,609 $ 6,946 Depreciation and amortization $ 2,765 $ 3,216 $ 522 $ 6,503 Income (loss) before income taxes $ 11,697 $ 17,733 $ ( 19,721 ) $ 9,709 Income tax expense (benefit) $ 3,774 $ 5,020 $ ( 5,655 ) $ 3,139 (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 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 and impairment charges, and amortization and depreciation expenses. 30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Three months ended September 30, 2024 Funeral Cemetery Corporate Total Revenue Services $ 39,892 $ 5,024 $ — $ 44,916 Merchandise 19,455 4,757 — 24,212 Cemetery property — 23,207 — 23,207 Other revenue 4,355 3,997 — 8,352 Total revenue 63,702 36,985 — 100,687 Less: Salaries, benefits, and commission expenses 17,275 9,286 — 26,561 Cost of merchandise 6,698 3,740 — 10,438 Allocated overhead costs (1) 3,290 1,263 — 4,553 Facilities and grounds expenses 2,816 2,106 — 4,922 General and administrative expenses (2) 2,453 834 — 3,287 Other segment expenses (4) 11,569 4,254 12,206 28,029 Operating income (loss) $ 19,601 $ 15,502 $ ( 12,206 ) $ 22,897 Interest expense $ 267 $ 17 $ 7,751 $ 8,035 Depreciation and amortization $ 2,912 $ 2,456 $ 242 $ 5,610 Income (loss) before income taxes $ 19,400 $ 15,639 $ ( 20,190 ) $ 14,849 Income tax expense (benefit) $ 6,247 $ 5,142 $ ( 6,406 ) $ 4,983 (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 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 and impairment charges, and amortization and depreciation expenses. 31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Nine months ended, September 30, 2025 Funeral Cemetery Corporate Total Revenue Services $ 128,495 $ 15,229 $ — $ 143,724 Merchandise 57,787 12,942 — 70,729 Cemetery property — 70,003 — 70,003 Other revenue 16,362 11,140 — 27,502 Total revenue 202,644 109,314 — 311,958 Less: Salaries, benefits, and commission expenses 51,837 30,878 — 82,715 Cost of merchandise 21,335 6,079 — 27,414 Allocated overhead costs (1) 9,914 4,039 — 13,953 Facilities and grounds expenses 8,506 4,748 — 13,254 General and administrative expenses (2) 8,242 2,828 — 11,070 Other segment expenses (3) 40,329 13,991 36,163 90,483 Operating income (loss) $ 62,481 $ 46,751 $ ( 36,163 ) $ 73,069 Interest expense $ 1,014 $ 13 $ 20,251 $ 21,278 Depreciation and amortization $ 8,426 $ 8,234 $ 1,417 $ 18,077 Income (loss) before income taxes $ 63,564 $ 48,811 $ ( 59,555 ) $ 52,820 Income tax expense (benefit) $ 16,341 $ 12,550 $ ( 15,306 ) $ 13,585 Capital expenditures $ 2,232 $ 8,574 $ 1,909 $ 12,715 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 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 and impairment charges, and amortization and depreciation expenses. 32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Nine months ended September 30, 2024 Funeral Cemetery Corporate Total Revenue Services $ 124,288 $ 14,760 $ — $ 139,048 Merchandise 61,778 13,380 — 75,158 Cemetery property — 67,353 — 67,353 Other revenue 13,062 11,877 — 24,939 Total revenue 199,128 107,370 — 306,498 Less: (1) Salaries, benefits, and commission expenses 52,433 28,471 — 80,904 Cost of merchandise 21,239 6,097 — 27,336 Allocated overhead costs (1) 9,896 3,620 — 13,516 Facilities and grounds expenses 7,879 4,908 — 12,787 General and administrative expenses (2) 7,725 2,636 — 10,361 Other segment expenses (3) 36,513 17,291 47,047 100,851 Operating income (loss) $ 63,443 $ 44,347 $ ( 47,047 ) $ 60,743 Interest expense $ 714 $ 24 $ 24,333 $ 25,071 Depreciation and amortization $ 8,787 $ 7,769 $ 718 $ 17,274 Income (loss) before income taxes $ 63,301 $ 44,651 $ ( 71,922 ) $ 36,030 Income tax expense (benefit) $ 22,722 $ 16,030 $ ( 25,820 ) $ 12,932 Capital expenditures $ 4,221 $ 6,593 $ 896 $ 11,710 Number of operating locations at year end 162 31 — 193 (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 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 and impairment charges, and amortization and depreciation expenses. 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 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; 34 • 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. 35