CARRIAGE SERVICES INC 10-Q

Item 1. Financial Statements. CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue: Service revenue $ 45,605 $ 46,510 $ 96,527 $ 99,520 Property and merchandise revenue 47,149 46,513 93,041 92,099 Other revenue 10,195 9,124 19,501 17,597 Total revenue 102,949 102,147 209,069 209,216 Field costs and expenses: Cost of service 23,897 23,787 48,344 48,364 Cost of merchandise 32,524 32,156 64,538 64,765 Cemetery property amortization 3,129 2,241 5,124 4,069 Field depreciation expense 3,357 3,288 6,765 6,610 Regional and unallocated funeral and cemetery costs 3,652 3,260 8,043 8,495 Other expenses 1,346 1,480 2,571 3,136 Total field costs and expenses 67,905 66,212 135,385 135,439 Gross profit 35,044 35,935 73,684 73,777 Corporate costs and expenses: General, administrative, and other 11,001 11,938 24,086 23,986 Net loss (gain) on divestitures and impairment charges 90 ( 1 ) 368 ( 5,771 ) Operating income 23,953 23,998 49,230 55,562 Interest expense 6,683 7,034 13,567 14,332 Other, net 113 107 107 ( 1,881 ) Income before income taxes 17,157 16,857 35,556 43,111 Expense for income taxes 4,935 5,260 10,098 13,451 Benefit related to discrete income tax items ( 50 ) ( 142 ) ( 306 ) ( 3,005 ) Total expense for income taxes 4,885 5,118 9,792 10,446 Net income $ 12,272 $ 11,739 $ 25,764 $ 32,665 Basic earnings per common share: $ 0.78 $ 0.75 $ 1.63 $ 2.09 Diluted earnings per common share: $ 0.77 $ 0.74 $ 1.61 $ 2.07 Dividends declared per common share: $ 0.1125 $ 0.1125 $ 0.2250 $ 0.2250 Weighted average number of common and common equivalent shares outstanding: Basic 15,651 15,458 15,609 15,352 Diluted 15,842 15,653 15,811 15,528 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 3 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except share data) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 2,550 $ 1,688 Accounts receivable, net 43,649 40,647 Inventories 7,727 7,763 Prepaid and other current assets 13,714 5,978 Total current assets 67,640 56,076 Preneed cemetery trust investments 113,456 109,152 Preneed funeral trust investments 112,900 115,416 Preneed cemetery receivables, net 69,605 67,055 Receivables from preneed funeral trusts, net 16,165 16,255 Property, plant, and equipment, net 286,815 286,810 Cemetery property, net 114,718 115,645 Goodwill 428,714 427,897 Intangible and other non-current assets, net 45,274 43,607 Operating lease right-of-use assets 11,563 12,045 Cemetery perpetual care trust investments 98,772 95,625 Non-current assets held for sale 322 322 Total assets $ 1,365,944 $ 1,345,905 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt and lease obligations $ 4,715 $ 4,296 Accounts payable 16,298 18,999 Accrued and other liabilities 25,467 33,922 Total current liabilities 46,480 57,217 Long-term debt 526,016 528,335 Obligations under finance leases, net of current portion 9,011 9,339 Obligations under operating leases, net of current portion 9,531 10,538 Deferred preneed cemetery revenue 79,360 76,781 Deferred preneed funeral revenue 32,654 33,663 Deferred tax liability 57,834 55,409 Other long-term liabilities 1,469 1,854 Deferred preneed cemetery receipts held in trust 113,456 109,152 Deferred preneed funeral receipts held in trust 112,900 115,416 Care trusts’ corpus 97,864 93,425 Total liabilities 1,086,575 1,091,129 Commitments and contingencies: Stockholders’ equity: Common stock, $ 0.01 par value; 80,000,000 shares authorized and 27,510,114 and 27,378,870 shares issued, respectively and 15,882,296 and 15,751,052 shares outstanding, respectively 275 274 Additional paid-in capital 237,367 238,539 Retained earnings 320,480 294,716 Treasury stock, at cost; 11,627,818 shares ( 278,753 ) ( 278,753 ) Total stockholders’ equity 279,369 254,776 Total liabilities and stockholders’ equity $ 1,365,944 $ 1,345,905 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 4 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Six months ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 25,764 $ 32,665 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,037 11,574 Provision for credit losses 2,048 1,973 Stock-based compensation expense 4,026 3,845 Deferred income tax expense 2,426 3,264 Amortization of intangibles 643 660 Amortization of debt issuance costs 259 255 Amortization and accretion of debt 292 278 Net loss (gain) on divestitures and impairment charges 368 ( 5,771 ) Net gain on sale of excess real property — ( 1,993 ) Changes in operating assets and liabilities that provided (used) cash: Accounts and preneed receivables ( 7,601 ) ( 11,430 ) Inventories, prepaid, and other current assets ( 7,376 ) ( 3,136 ) Intangible and other non-current assets ( 2,717 ) ( 1,117 ) Preneed funeral and cemetery trust investments ( 3,380 ) ( 4,281 ) Accounts payable ( 3,444 ) ( 2,245 ) Accrued and other liabilities ( 8,229 ) ( 10,458 ) Deferred preneed funeral and cemetery revenue 1,572 1,941 Deferred preneed funeral and cemetery receipts held in trust 4,762 5,853 Net cash provided by operating activities 22,450 21,877 Cash flows from investing activities: Acquisitions of businesses ( 4,500 ) — Capital expenditures ( 9,223 ) ( 6,009 ) Proceeds from divestitures and sale of other assets 342 18,822 Net cash (used in) provided by investing activities ( 13,381 ) 12,813 Cash flows from financing activities: Borrowings from the credit facility 63,029 24,600 Payments against the credit facility ( 65,729 ) ( 48,700 ) Payments on acquisition debt and obligations under finance leases ( 251 ) ( 221 ) Proceeds from the exercise of stock options and employee stock purchase plan contributions 688 983 Taxes paid on restricted stock, performance award vestings, and exercise of stock options ( 2,387 ) ( 7,631 ) Dividends paid on common stock ( 3,557 ) ( 3,488 ) Net cash used in financing activities ( 8,207 ) ( 34,457 ) Net increase in cash and cash equivalents 862 233 Cash and cash equivalents at beginning of period 1,688 1,165 Cash and cash equivalents at end of period $ 2,550 $ 1,398 Supplemental disclosure of cash flow information: Cash paid for interest and financing costs $ 12,901 $ 13,614 Cash paid for income taxes 13,109 9,884 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 5 CARRIAGE SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited and in thousands) Three months ended June 30, 2026 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - March 31, 2026 15,872 $ 275 $ 237,209 $ 308,208 $ ( 278,753 ) $ 266,939 Net income — — — 12,272 — 12,272 Issuance of common stock from employee stock purchase plan 8 — 325 — — 325 Issuance of common stock to directors and board advisor 2 — 62 — — 62 Exercise of stock options 18 — 3 — — 3 Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 16 ) — ( 315 ) — — ( 315 ) Stock-based compensation expense — — 1,868 — — 1,868 Dividends on common stock ($ 0.1125 per share) — — ( 1,785 ) — — ( 1,785 ) Balance - June 30, 2026 15,884 $ 275 $ 237,367 $ 320,480 $ ( 278,753 ) $ 279,369 Three months ended June 30, 2025 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - March 31, 2025 15,693 $ 273 $ 237,407 $ 264,135 $ ( 278,753 ) $ 223,062 Net income — — — 11,739 — 11,739 Issuance of common stock from employee stock purchase plan 9 — 295 — — 295 Issuance of common stock to directors and board advisor 1 — 63 — — 63 Exercise of stock options 2 — — — — — Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 4 ) — ( 2 ) — — ( 2 ) Stock-based compensation expense — — 2,029 — — 2,029 Dividends on common stock ($ 0.1125 per share) — — ( 1,766 ) — — ( 1,766 ) Balance - June 30, 2025 15,701 $ 273 $ 238,026 $ 275,874 $ ( 278,753 ) $ 235,420 6 Six months ended June 30, 2026 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - December 31, 2025 15,751 $ 274 $ 238,539 $ 294,716 $ ( 278,753 ) $ 254,776 Net income — — — 25,764 — 25,764 Issuance of common stock from employee stock purchase plan 18 — 685 — — 685 Issuance of common stock to directors and board advisor 3 — 125 — — 125 Issuance of restricted common stock 110 1 ( 1 ) — — — Exercise of stock options 63 — 3 — — 3 Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 62 ) — ( 2,387 ) — — ( 2,387 ) Stock-based compensation expense — — 3,901 — — 3,901 Dividends on common stock ($ 0.2250 per share) — — ( 3,557 ) — — ( 3,557 ) Other 1 — 59 — — 59 Balance - June 30, 2026 15,884 $ 275 $ 237,367 $ 320,480 $ ( 278,753 ) $ 279,369 Six months ended June 30, 2025 Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Balance - December 31, 2024 15,254 $ 269 $ 243,825 $ 243,209 $ ( 278,753 ) $ 208,550 Net income — — — 32,665 — 32,665 Issuance of common stock from employee stock purchase plan 20 — 662 — — 662 Issuance of common stock to directors and board advisor 3 — 140 — — 140 Issuance of common stock 271 3 ( 3 ) — — — Issuance of restricted common stock 115 1 ( 1 ) — — — Exercise of stock options 79 — 321 — — 321 Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 53 ) — ( 7,631 ) — — ( 7,631 ) Stock-based compensation expense — — 3,705 — — 3,705 Dividends on common stock ($ 0.2250 per share) — — ( 3,488 ) — — ( 3,488 ) Other 12 — 496 — — 496 Balance - June 30, 2025 15,701 $ 273 $ 238,026 $ 275,874 $ ( 278,753 ) $ 235,420 The accompanying condensed notes are an integral part of these Condensed Consolidated Financial Statements. 7 NOTES TO 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 (“U.S.”). Our operations are reported in two business segments: Funeral Home Operations, which currently accounts for approximately 66 % of our total revenue and Cemetery Operations, which currently accounts for approximately 34 % of our total revenue. At June 30, 2026, we operated 155 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, 2025. 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, 2025, unless otherwise disclosed herein, and should be read in conjunction therewith. Use of Estimates The preparation of our Condensed 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 The Company classifies assets and liabilities (disposal groups) to be sold as held for sale (“HFS”) in the period in which all of the following criteria are met: (1) management, having the authority to approve the action, commits to a plan to sell the disposal group; (2) the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; (3) an active program to locate a buyer and other actions required to complete 8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) the plan to sell the disposal group have been initiated; (4) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; (5) the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale. Additionally, depreciation is not recorded during the period in which the long-lived assets, included in the disposal group, are classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items current and non-current assets held for sale and current and long-term liabilities held for sale in the Condensed Consolidated Balance Sheets. Held for sale balances on our Condensed Consolidated Balance Sheets primarily consist of $ 0.3 million of property, plant and equipment as of June 30, 2026, and December 31, 2025, respectively. On July 10, 2026, we completed the sale of excess land that was classified as held for sale on our Condensed Consolidated Balance Sheets as of June 30, 2026. During the three months ended June 30, 2026, we sold one funeral home for an aggregate of $ 0.3 million. We recorded an impairment of $ 0.1 million and $ 0.3 million, for the three and six months ended June 30, 2026, respectively, resulting in an immaterial loss recorded in Net (gain) loss on divestitures and impairment charges on our Condensed Consolidated Statements of Operations. During the three months ended June 30, 2025, we merged one funeral home with another business we own in an existing market. During the six months ended June 30, 2025, we sold two funeral homes and three cemeteries for an aggregate of $ 15.8 million and merged one funeral home with another business we own in an existing market. We recorded an impairment of $ 0.1 million during the six months ended June 30, 2025, resulting in a gain of $ 5.9 million recorded in Net (gain) loss on divestitures and impairment charges on our Condensed Consolidated Statements of Operations. Income Taxes Income tax expense was $ 4.9 million and $ 5.1 million for the three months ended June 30, 2026 and 2025, respectively, and $ 9.8 million and $ 10.4 million for the six months ended June 30, 2026 and 2025, respectively. Our operating tax rate before discrete items was 28.8 % and 31.2 % for the three months ended June 30, 2026 and 2025, respectively, and 28.4 % and 31.2 % for the six months ended June 30, 2026 and 2025, respectively. 2. RECENTLY ISSUED ACCOUNTING STANDARDS 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 consolidated financial statements as it modifies disclosure requirements only. 9 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 consolidated financial statements. 3. SEGMENT REPORTING Our Chief Operating Decision Maker (the “CODM”), who is the Chief Executive Officer, utilizes segment adjusted operating profit 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 CODM does not review disaggregated assets by segment; therefore assets by segment are not provided. 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, regional and unallocated funeral and cemetery costs, and gross profit by segment as follows: (in thousands) for the three and six months ended June 30, 2026 and 2025, respectively: 10 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Three months ended June 30, 2026 Funeral Cemetery Total Revenue Services $ 40,414 $ 5,191 $ 45,605 Merchandise 17,912 4,433 22,345 Cemetery property — 24,804 24,804 Other revenue 7,366 2,829 10,195 Total revenue $ 65,692 $ 37,257 $ 102,949 Less: Salaries, benefits, and commission expenses $ 17,607 $ 11,221 $ 28,828 Cost of merchandise 3,328 2,069 5,397 Allocated overhead costs (1) 3,039 1,244 4,283 Facilities and grounds expenses 2,774 1,564 4,338 General and administrative expenses (2) 2,818 1,024 3,842 Other segment expenses (3) 8,946 2,133 11,079 Adjusted operating profit (4) $ 27,180 $ 18,002 $ 45,182 Reconciliation of Adjusted operating profit margin to Gross profit Cemetery property amortization $ — $ 3,129 $ 3,129 Field depreciation expense 2,829 528 3,357 Regional and unallocated funeral and cemetery costs 2,096 1,556 3,652 Gross profit $ 22,255 $ 12,789 $ 35,044 Corporate costs and expenses: General and administrative expenses $ 11,001 Net loss on divestitures and impairment charges 90 Operating income $ 23,953 Interest expense $ 6,683 Other, net 113 Income before income taxes $ 17,157 (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) Other segment expenses primarily include transportation costs, other funeral costs, and non-payroll related promotional costs. (4) During the first quarter of 2026, the Company changed its measure of segment profit from segment operating income to segment adjusted operating profit. The change reflects how management now evaluates segment performance and allocates resources. The change primarily relates to the exclusion of depreciation, amortization, and certain corporate allocations. Prior-period amounts have been recast for comparability. 11 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Three months ended June 30, 2025 Funeral Cemetery Total Revenue Services $ 41,308 $ 5,202 $ 46,510 Merchandise 18,264 4,330 22,594 Cemetery property — 23,919 23,919 Other revenue 5,675 3,449 9,124 Total revenue $ 65,247 $ 36,900 $ 102,147 Less: Salaries, benefits, and commission expenses $ 17,011 $ 10,533 $ 27,544 Cost of merchandise 5,276 2,135 7,411 Allocated overhead costs (1) 3,387 1,367 4,754 Facilities and grounds expenses 2,709 1,561 4,270 General and administrative expenses (2) 2,703 956 3,659 Other segment expenses (3) 7,911 1,874 9,785 Adjusted operating profit (4) $ 26,250 $ 18,474 $ 44,724 Reconciliation of Adjusted operating profit margin to Gross profit Cemetery property amortization $ — $ 2,241 $ 2,241 Field depreciation expense 2,835 453 3,288 Regional and unallocated funeral and cemetery costs 1,736 1,524 3,260 Gross profit $ 21,679 $ 14,256 $ 35,935 Corporate costs and expenses: General and administrative expenses $ 11,938 Net loss on divestitures and impairment charges ( 1 ) Operating income $ 23,998 Interest expense $ 7,034 Other, net 107 Income before income taxes $ 16,857 (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) Other segment expenses primarily include transportation costs, other funeral costs, and non-payroll related promotional costs. (4) During the first quarter of 2026, the Company changed its measure of segment profit from segment operating income to segment adjusted operating profit. The change reflects how management now evaluates segment performance and allocates resources. The change primarily relates to the exclusion of depreciation, amortization, and certain corporate allocations. Prior-period amounts have been recast for comparability. 12 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Six months ended, June 30, 2026 Funeral Cemetery Total Revenue Services $ 85,906 $ 10,621 $ 96,527 Merchandise 38,425 8,598 47,023 Cemetery property — 46,018 46,018 Other revenue 13,075 6,426 19,501 Total revenue $ 137,406 $ 71,663 $ 209,069 Less: Salaries, benefits, and commission expenses $ 35,480 $ 21,355 $ 56,835 Cost of merchandise 8,919 4,070 12,989 Allocated overhead costs (1) 5,998 2,405 8,403 Facilities and grounds expenses 5,845 2,815 8,660 General and administrative expenses (2) 6,246 2,077 8,323 Other segment expenses (3) 16,140 4,103 20,243 Adjusted operating profit (4) $ 58,778 $ 34,838 $ 93,616 Reconciliation of Adjusted operating profit to Gross profit Cemetery property amortization $ — $ 5,124 $ 5,124 Field depreciation expense 5,715 1,050 6,765 Regional and unallocated funeral and cemetery costs 4,427 3,616 8,043 Gross profit $ 48,636 $ 25,048 $ 73,684 Corporate costs and expenses: General and administrative expenses $ 24,086 Net loss on divestitures and impairment charges 368 Operating income $ 49,230 Interest expense $ 13,567 Other, net 107 Income before income taxes $ 35,556 (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) Other segment expenses primarily include transportation costs, other funeral costs, and non-payroll related promotional costs. (4) During the first quarter of 2026, the Company changed its measure of segment profit from segment operating income to segment adjusted operating profit. The change reflects how management now evaluates segment performance and allocates resources. The change primarily relates to the exclusion of depreciation, amortization, and certain corporate allocations. Prior-period amounts have been recast for comparability. 13 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Six months ended June 30, 2025 Funeral Cemetery Total Revenue Services 89,257 10,263 $ 99,520 Merchandise 39,820 8,369 48,189 Cemetery property — 43,910 43,910 Other revenue 10,789 6,808 17,597 Total revenue 139,866 69,350 209,216 Less: Salaries, benefits, and commission expenses 34,988 20,452 55,440 Cost of merchandise 11,547 3,961 15,508 Allocated overhead costs (1) 6,613 2,699 9,312 Facilities and grounds expenses 5,638 2,765 8,403 General and administrative expenses (2) 5,724 1,851 7,575 Other segment expenses (3) 15,927 4,100 20,027 Adjusted operating profit (4) $ 59,429 $ 33,522 $ 92,951 Reconciliation of Adjusted operating profit margin to Gross profit Cemetery property amortization — 4,069 $ 4,069 Field depreciation expense 5,661 949 $ 6,610 Regional and unallocated funeral and cemetery costs 4,886 3,609 8,495 Gross profit $ 48,882 $ 24,895 $ 73,777 Corporate costs and expenses: General and administrative expenses $ 23,986 Net loss on divestitures and impairment charges ( 5,771 ) Operating income $ 55,562 Interest expense $ 14,332 Other, net ( 1,881 ) Income before income taxes $ 43,111 (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) Other segment expenses primarily include transportation costs, other funeral costs, and non-payroll related promotional costs. (4) During the first quarter of 2026, the Company changed its measure of segment profit from segment operating income to segment adjusted operating profit. The change reflects how management now evaluates segment performance and allocates resources. The change primarily relates to the exclusion of depreciation, amortization, and certain corporate allocations. Prior-period amounts have been recast for comparability. 14 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. EARNINGS PER SHARE The following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Numerator for basic and diluted earnings per share: Net income $ 12,272 $ 11,739 $ 25,764 $ 32,665 Less: Earnings allocated to unvested restricted stock ( 150 ) ( 194 ) ( 333 ) ( 540 ) Income attributable to common stockholders $ 12,122 $ 11,545 $ 25,431 $ 32,125 Denominator: Denominator for basic earnings per common share – weighted average shares outstanding 15,651 15,458 15,609 15,352 Effect of dilutive securities: Stock options 191 195 202 176 Denominator for diluted earnings per common share – weighted average shares outstanding 15,842 15,653 15,811 15,528 Basic earnings per common share: $ 0.78 $ 0.75 $ 1.63 $ 2.09 Diluted earnings per common share: $ 0.77 $ 0.74 $ 1.61 $ 2.07 Stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Antidilutive stock options 208 228 213 224 5. 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 Condensed Consolidated Balance Sheets (in thousands): June 30, 2026 December 31, 2025 Goodwill at the beginning of the period $ 427,897 $ 414,859 Increase in goodwill related to acquisitions 1,096 37,746 Decrease in goodwill related to divestitures ( 279 ) ( 24,708 ) Goodwill at the end of the period $ 428,714 $ 427,897 During the six months ended June 30, 2026, we allocated $ 0.3 million of goodwill to the sale of one funeral home which was recorded in Net loss on divestitures and impairment charges on our Condensed Consolidated Statements of Operations, allocated to our funeral home segment. During the six months ended June 30, 2025, we allocated $ 4.2 million of goodwill to the sale of two funeral homes and three cemeteries which was recorded in Net loss (gain) on divestitures and impairment charges on our Condensed Consolidated Statements of Operations, of which $ 2.6 million was allocated to our funeral home segment and $ 1.6 million was allocated to our cemetery segment. During the first quarter of 2026, the Company implemented an executive leadership restructuring that changed the manner in which certain funeral home operations are managed and reviewed. As a result, the Company reassessed its reporting unit 15 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) structure under ASC 350, Intangibles—Goodwill and Other and determined that certain reporting units within the funeral home segment no longer met the criteria to be considered separate reporting units. Accordingly, the Company combined these reporting units into a single reporting unit. This change did not affect the Company’s operating segments under ASC 280, Segment Reporting. In connection with the change in reporting unit structure, the Company performed a qualitative goodwill impairment assessment and concluded that it was not more likely than not that the fair value of the combined reporting unit was less than its carrying amount. Accordingly, no quantitative impairment test was required, and no goodwill impairment charge was recognized. 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 are comprised of the following (in thousands): June 30, 2026 Column1 Funeral Cemetery Corporate Total Trade and financed receivables $ 5,769 $ 33,659 $ — $ 39,428 Other receivables 852 2,900 3,015 6,767 Allowance for credit losses ( 273 ) ( 2,273 ) — ( 2,546 ) Accounts receivable, net $ 6,348 $ 34,286 $ 3,015 $ 43,649 December 31, 2025 Column1 Funeral Cemetery Corporate Total Trade and financed receivables $ 7,369 $ 31,267 $ — $ 38,636 Other receivables 1,245 2,614 1,726 5,585 Allowance for credit losses ( 363 ) ( 3,211 ) — ( 3,574 ) Accounts receivable, net $ 8,251 $ 30,670 $ 1,726 $ 40,647 Other receivables include supplier rebates, commissions due from third-party insurance companies and perpetual care income receivables. The following table summarizes the activity in our allowance for credit losses by portfolio segment for the six months ended June 30, 2026 (in thousands): January 1, 2026 Provision for Credit Losses Write Offs Recoveries June 30, 2026 Trade and financed receivables: Funeral $ ( 363 ) $ ( 243 ) $ 749 $ ( 416 ) $ ( 273 ) Cemetery ( 3,211 ) ( 651 ) 1,589 — ( 2,273 ) Total allowance for credit losses on trade and financed receivables $ ( 3,574 ) $ ( 894 ) $ 2,338 $ ( 416 ) $ ( 2,546 ) Cemetery Receivables Our cemetery receivables are comprised of the following (in thousands): June 30, 2026 December 31, 2025 Interment rights $ 107,481 $ 99,741 Merchandise and services 17,920 17,761 Unearned finance charges 4,496 4,805 Cemetery receivables $ 129,897 $ 122,307 16 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The components of our cemetery receivables are as follows (in thousands): June 30, 2026 December 31, 2025 Cemetery receivables $ 129,897 $ 122,307 Less: unearned finance charges ( 4,496 ) ( 4,805 ) Cemetery receivables, at amortized cost $ 125,401 $ 117,502 Less: allowance for contract cancellation and credit losses ( 6,091 ) ( 5,812 ) Less: balances due on undelivered cemetery preneed contracts ( 18,319 ) ( 16,579 ) Less: amounts in accounts receivable ( 31,386 ) ( 28,056 ) Preneed cemetery receivables, net $ 69,605 $ 67,055 The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the six months ended June 30, 2026 (in thousands): January 1, 2026 Provision for Credit Losses Write Offs June 30, 2026 Total allowance for credit losses on Preneed cemetery receivables, net $ ( 2,601 ) $ ( 1,154 ) $ ( 63 ) $ ( 3,818 ) The amortized cost basis of our cemetery receivables by year of origination as of June 30, 2026 is as follows (in thousands): 2026 2025 2024 2023 2022 Prior Total Total cemetery receivables, at amortized cost $ 36,562 $ 44,683 $ 27,364 $ 10,718 $ 4,617 $ 1,457 $ 125,401 The aging of past due cemetery receivables as of June 30, 2026 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 $ 4,138 $ 1,629 $ 849 $ 6,834 $ 13,450 $ 93,632 $ 107,082 Deferred revenue 419 272 142 2,578 3,411 19,404 22,815 Total contracts $ 4,557 $ 1,901 $ 991 $ 9,412 $ 16,861 $ 113,036 $ 129,897 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, Credit Facility, and Senior Notes (as defined in Note 10) are classified within Level 2 of the Fair Value Measurements hierarchy. At June 30, 2026, the carrying value and fair value of our Credit Facility was $ 124.0 million. We believe that our Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and therefore, the carrying value of our Credit Facility approximates fair value. We estimate the fair value of our acquisition debt utilizing an income approach, which uses a present value calculation to discount payments based on current market rates as of the reporting date. At June 30, 2026, the carrying value of our acquisition debt was $ 6.2 million, which approximated its fair value. The fair value of our Senior Notes was $ 383.1 million at June 30, 2026, based on the last traded or broker quoted price. In addition, we have an investment in a limited partnership fund, whose fair value has been estimated using the net asset value per share practical expedient described in ASC 820-10-35-59, Fair Value Measurement of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) and therefore, has not been classified in the fair value hierarchy. The investment strategy of this fund is to generate attractive risk-adjusted returns over a multi-year performance period through the construction of a concentrated portfolio of investments possessing certain distinct business attributes that suggest the potential for long-term value creation. The value of the investments in this fund cannot be liquidated at June 30, 2026 because the investments include restrictions that do not allow for liquidation until 2027. As of June 30, 2026, we do not have an unfunded commitment for this investment. Furthermore, we have nine 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 17 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 41% 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 59 % of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions. As of June 30, 2026, we had approximately $29 million in unfunded commitments for these investments. We identified investments in fixed income securities, common stock, and mutual funds presented within the preneed and perpetual care trust investments categories on our Condensed Consolidated Balance Sheets as having met the criteria for fair value measurement. 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 receivables at cost. The following three-level valuation hierarchy based upon the transparency of inputs is utilized in the measurement and valuation of financial assets or liabilities as of the measurement date: • Level 1—Fair value of securities based on unadjusted quoted prices for identical assets or liabilities in active markets. Our investments classified as Level 1 securities include cash, U.S. treasury debt, common stock and equity mutual funds; • Level 2—Fair value of securities estimated based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation. These inputs include interest rates, yield curves, credit risk, prepayment speeds, rating and tax-exempt status. Our investments classified as Level 2 securities include U.S. agency obligations, foreign debt, corporate debt, preferred stocks, certificates of deposit and fixed income mutual funds and other investments. • Level 3—Unobservable inputs based upon the reporting entity’s internally developed assumptions, which market participants would use in pricing the asset or liability. As of June 30, 2026 and 2025, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value. See Notes 8 and 9 to our Condensed Consolidated Financial Statements for the fair value hierarchy levels of our trust investments. 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 Condensed 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. 18 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Preneed Cemetery Trust Investments The components of Preneed cemetery trust investments on our Condensed Consolidated Balance Sheets are as follows (in thousands): June 30, 2026 December 31, 2025 Preneed cemetery trust investments, at market value $ 116,947 $ 112,531 Less: allowance for contract cancellation ( 3,491 ) ( 3,379 ) Preneed cemetery trust investments $ 113,456 $ 109,152 The cost and market values associated with preneed cemetery trust investments at June 30, 2026, are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 15,317 $ — $ — $ 15,317 Common stock 1 11,736 2,123 ( 1,679 ) 12,180 Limited partnership fund 3,514 679 — 4,193 Mutual funds: Equity 1 10,233 77 ( 1,203 ) 9,107 Fixed income 2 43,007 92 ( 358 ) 42,741 Alternative investments 32,552 392 ( 157 ) 32,787 Trust securities $ 116,359 $ 3,363 $ ( 3,397 ) $ 116,325 Accrued investment income $ 622 $ 622 Preneed cemetery trust investments $ 116,947 Market value as a percentage of cost 100.0 % The cost and market values associated with preneed cemetery trust investments at December 31, 2025 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 15,653 $ — $ — $ 15,653 Common stock 1 11,599 768 ( 1,709 ) 10,658 Limited partnership fund 3,496 — ( 93 ) 3,403 Mutual funds: Equity 1 9,483 — ( 279 ) 9,204 Fixed income 2 43,013 353 ( 50 ) 43,316 Alternative investments 29,380 374 ( 68 ) 29,686 Trust securities $ 112,624 $ 1,495 $ ( 2,199 ) $ 111,920 Accrued investment income $ 611 $ 611 Preneed cemetery trust investments $ 112,531 Market value as a percentage of cost 99.4 % There were no fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at June 30, 2026 and December 31, 2025. 19 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Preneed cemetery trust investment security transactions recorded in Other, net on our Condensed Consolidated Statements of Operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Investment income $ 648 $ 770 $ 1,156 $ 1,417 Realized gains 40 6,199 402 8,202 Realized losses ( 16 ) ( 5,494 ) ( 98 ) ( 7,097 ) Unrealized gains (losses), net 294 ( 886 ) ( 34 ) ( 31 ) Expenses and taxes ( 271 ) ( 585 ) ( 923 ) ( 809 ) Net change in deferred preneed cemetery receipts held in trust ( 695 ) ( 4 ) ( 503 ) ( 1,682 ) $ — $ — $ — $ — Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Purchases $ ( 8,359 ) $ ( 38,172 ) $ ( 12,398 ) $ ( 41,678 ) Sales 6,793 29,933 10,100 48,002 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 Condensed Consolidated Balance Sheets are as follows (in thousands): June 30, 2026 December 31, 2025 Preneed funeral trust investments, at market value $ 116,379 $ 118,993 Less: allowance for contract cancellation ( 3,479 ) ( 3,577 ) Preneed funeral trust investments $ 112,900 $ 115,416 The cost and market values associated with preneed funeral trust investments at June 30, 2026 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 20,488 $ — $ — $ 20,488 Fixed income securities: U.S agency obligations 2 307 — ( 19 ) 288 Common stock 1 11,373 2,057 ( 1,627 ) 11,803 Limited partnership fund 3,405 658 — 4,063 Mutual funds: Equity 1 9,382 7 ( 1,165 ) 8,224 Fixed income 2 37,746 79 ( 321 ) 37,504 Other investments 2 1,692 — — 1,692 Alternative investments 31,545 379 ( 153 ) 31,771 Trust securities $ 115,938 $ 3,180 $ ( 3,285 ) $ 115,833 Accrued investment income $ 546 $ 546 Preneed cemetery trust investments $ 116,379 Market value as a percentage of cost 99.9 % 20 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands): Due in one year or less $ 99 Due in one to five years 91 Due in five to ten years 98 Thereafter — Total fixed income securities $ 288 The cost and market values associated with preneed funeral trust investments at December 31, 2025 are detailed below (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 20,985 $ — $ — $ 20,985 Fixed income securities: U.S agency obligations 2 306 — ( 18 ) 288 Common stock 1 11,981 793 ( 1,765 ) 11,009 Limited partnership fund 3,611 — ( 97 ) 3,514 Mutual funds: Equity 1 9,226 — ( 276 ) 8,950 Fixed income 2 41,059 331 ( 48 ) 41,342 Other investments 2 1,724 — — 1,724 Alternative investments 30,344 386 ( 70 ) 30,660 Trust securities $ 119,236 $ — $ 1,510 $ — $ ( 2,274 ) $ 118,472 Accrued investment income $ 521 $ 521 Preneed cemetery trust investments $ 118,993 Market value as a percentage of cost 99.4 % The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at June 30, 2026, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): June 30, 2026 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 $ — $ — $ 288 $ ( 19 ) $ 288 $ ( 19 ) Total fixed income securities with an unrealized loss $ — $ — $ 288 $ ( 19 ) $ 288 $ ( 19 ) 21 NOTES TO CONDENSED 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, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): December 31, 2025 In Loss Position Less than 12 months In Loss Position Greater than 12 months Total Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses Fixed income securities: U.S agency obligations $ — $ — $ 288 $ ( 18 ) $ 288 $ ( 18 ) Total fixed income securities with an unrealized loss $ — $ — $ 288 $ ( 18 ) $ 288 $ ( 18 ) Preneed funeral trust investment security transactions recorded in Other, net on our Condensed Consolidated Statements of Operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Investment income $ 498 $ 521 897 994 Realized gains 39 5,521 406 7,448 Realized losses ( 15 ) ( 4,519 ) ( 98 ) ( 6,228 ) Unrealized gains (losses), net 296 ( 1,102 ) ( 105 ) 211 Expenses and taxes ( 316 ) ( 365 ) ( 705 ) ( 470 ) Net change in deferred preneed funeral receipts held in trust ( 501 ) ( 56 ) ( 395 ) ( 1,955 ) $ 1 $ — $ — $ — Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Purchases $ ( 7,669 ) $ ( 33,083 ) ( 11,407 ) ( 36,455 ) Sales 6,583 25,098 9,934 42,457 Cemetery Perpetual Care Trust Investments Care trusts’ corpus on our Condensed Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus are as follows (in thousands): June 30, 2026 December 31, 2025 Cemetery perpetual care trust investments, at market value $ 98,772 $ 95,625 Obligations due to (due from) trust ( 908 ) ( 2,200 ) Care trusts' corpus $ 97,864 $ 93,425 22 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at June 30, 2026 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 6,302 $ — $ — $ 6,302 Common stock 1 10,288 1,861 ( 1,472 ) 10,677 Limited partnership fund 3,081 595 — 3,676 Mutual funds: Equity 1 9,386 120 ( 1,054 ) 8,452 Fixed income 2 40,564 90 ( 330 ) 40,324 Alternative investments 28,535 344 ( 138 ) 28,741 Trust securities $ 98,156 $ 3,010 $ ( 2,994 ) $ 98,172 Accrued investment income $ 600 $ 600 Preneed cemetery trust investments $ 98,772 Market value as a percentage of cost 100.0 % The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2025 (in thousands): Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value Cash and money market accounts 1 $ 8,800 $ — $ — $ 8,800 Fixed income securities: Corporate debt 2 94 2 — 96 Common stock 1 10,527 1,028 ( 1,451 ) 10,104 Limited partnership fund 2,892 — ( 77 ) 2,815 Mutual funds: Equity 1 9,271 216 ( 257 ) 9,230 Fixed income 2 39,229 319 ( 145 ) 39,403 Alternative investments 24,308 310 ( 57 ) 24,561 Trust securities $ 95,121 $ 1,875 $ ( 1,987 ) $ 95,009 Accrued investment income $ 616 $ 616 Preneed cemetery trust investments $ 95,625 Market value as a percentage of cost 99.9 % There were no fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at June 30, 2026 and December 31, 2025. Perpetual care trust investment security transactions recorded in Other, net on our Condensed Consolidated Statements of Operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Realized gains $ 5 $ 1,028 700 1,279 Realized losses ( 2 ) ( 1,228 ) $ ( 173 ) $ ( 1,429 ) Unrealized gains (losses), net 257 ( 901 ) 16 ( 213 ) Net change in care trusts’ corpus ( 260 ) 1,101 ( 543 ) 363 $ — $ — $ — $ — 23 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Investment income $ 1,528 $ 2,420 $ 3,828 $ 4,907 Realized losses ( 462 ) ( 587 ) ( 891 ) ( 1,259 ) Total $ 1,066 $ 1,833 $ 2,937 $ 3,648 Purchases and sales of investments in the perpetual care trusts are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Purchases $ ( 7,682 ) $ ( 35,774 ) $ ( 11,232 ) $ ( 38,896 ) Sales 5,955 26,968 $ 12,332 $ 42,931 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): June 30, 2026 December 31, 2025 Preneed funeral trust funds, at cost $ 16,665 $ 16,758 Less: allowance for contract cancellation ( 500 ) ( 503 ) Receivables from preneed funeral trusts, net $ 16,165 $ 16,255 The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations related to the underlying preneed funeral contracts at June 30, 2026 and December 31, 2025. The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes unrealized gains and losses on trust assets. The composition of the preneed trust funds at June 30, 2026, is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 2,268 $ 2,268 Fixed income investments 10,975 10,975 Mutual funds and common stocks 3,418 3,269 Annuities 4 4 Total $ 16,665 $ 16,516 The composition of the preneed trust funds at December 31, 2025, is as follows (in thousands): Historical Cost Basis Fair Value Cash and cash equivalents $ 2,220 $ 2,220 Fixed income investments 11,108 11,108 Mutual funds and common stocks 3,426 3,306 Annuities 4 4 Total $ 16,758 $ 16,638 24 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 10. LONG TERM DEBT Our long-term debt consists of the following (in thousands): June 30, 2026 December 31, 2025 Senior Notes $ 397,693 $ 397,319 Credit Facility 122,912 125,435 Acquisition debt, net of current portion 5,411 5,581 Total Long-term debt $ 526,016 $ 528,335 Senior Notes The carrying value of our 4.25 % senior notes due 2029 (the “Senior Notes”) is reflected on our Condensed Consolidated Balance Sheets as follows (in thousands): June 30, 2026 December 31, 2025 Principal amount $ 400,000 $ 400,000 Debt discount, net of accumulated amortization of $ 2,702 and $ 2,411 , respectively ( 1,798 ) ( 2,089 ) Debt issuance costs, net of accumulated amortization of $ 768 and $ 685 , respectively ( 509 ) ( 592 ) Carrying value of the Senior Notes $ 397,693 $ 397,319 At June 30, 2026, the fair value of the Senior Notes, which are Level 2 measurements, was $ 383.1 million. The Senior Notes were issued under an indenture, dated as of May 13, 2021 (the “Indenture”), among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee. The Senior Notes are unsecured, senior obligations and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally by each of the Subsidiary Guarantors. The Senior Notes mature on May 15, 2029, unless earlier redeemed or purchased and bear interest at 4.25 % per year, which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021. The Indenture contains restrictive covenants limiting our ability and our Restricted Subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness or issue certain preferred shares, create liens on certain assets to secure debt, pay dividends or make other equity distributions, purchase or redeem capital stock, make certain investments, sell assets, agree to certain restrictions on the ability of Restricted Subsidiaries to make payments to us, consolidate, merge, sell or otherwise dispose of all or substantially all assets, or engage in transactions with affiliates. The Indenture also contains customary events of default. The interest expense and amortization of debt discount and debt issuance costs related to our Senior Notes are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Filter Handle Senior Notes interest expense 4,250 4,250 $ 8,500 $ 8,500 X Senior Notes amortization of debt discount 145 140 291 278 X Senior Notes amortization of debt issuance costs 42 40 83 79 X The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of approximately 35 months of the Senior Notes. The effective interest rates on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for both the three and six months ended June 30, 2026 and 2025 were 4.42 % and 4.30 %, respectively. Credit Facility At June 30, 2026, 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. 25 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 Senior Notes above) 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) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein. The Credit Facility contains customary affirmative covenants, including, but not limited to, covenants with respect to the use of proceeds, payment of taxes and other obligations, continuation of the Company’s business and the maintenance of existing rights and privileges, the maintenance of property and insurance, among others. In addition, the Credit Facility also contains customary negative covenants, including, but not limited to, covenants that restrict (subject to certain exceptions) the ability of the Company and the Subsidiary Guarantors to incur indebtedness, grant liens, make investments, engage in mergers and acquisitions, and pay dividends and other restricted payments, and certain financial maintenance covenants. At June 30, 2026, we were subject to the following financial covenants under our Credit Facility: (A) a Total Leverage Ratio not to exceed 5.00 to 1.00 and (B) a Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.20 to 1.00 as of the end of any period of four consecutive fiscal quarters. These financial maintenance covenants are calculated for the Company and its subsidiaries on a consolidated basis. We were in compliance with all of the covenants contained in our Credit Facility at June 30, 2026. Our Credit Facility and acquisition debt consisted of the following (in thousands): June 30, 2026 December 31, 2025 Credit Facility $ 124,000 $ 126,700 Debt issuance costs, net of accumulated amortization of $ 3,477 and $ 3,300 , respectively ( 1,088 ) ( 1,265 ) Total Credit Facility $ 122,912 $ 125,435 Acquisition debt $ 6,205 $ 6,188 Less: current portion ( 794 ) ( 607 ) Total acquisition debt, net of current portion $ 5,411 $ 5,581 At June 30, 2026, we had outstanding borrowings under the Credit Facility of $ 124.0 million. We also had one letter of credit for $ 2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2026, and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At June 30, 2026, we had $ 123.8 million of availability under the Credit Facility. Outstanding borrowings under our Credit Facility bear interest at a prime rate or the SOFR rate, plus an applicable margin based on our leverage ratio. At June 30, 2026, the prime rate margin was equivalent to 1.125 % and the SOFR term margin was 2.225 %. The weighted average interest rate on our Credit Facility was 6.0 % and 6.8 % for the three months ended June 30, 2026 and 2025, respectively. The weighted average interest rate on our Credit Facility was 5.9 % and 6.9 % for the three months ended June 30, 2026 and 2025, respectively. We have no material assets or operations independent of the Subsidiary Guarantors, as all of our assets and operations are held and conducted by the Subsidiary Guarantors. Additionally, we do not currently have any significant restrictions on our ability to receive dividends or loans from any Subsidiary Guarantors. 26 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Credit Facility interest expense 1,977 2,102 $ 3,964 $ 4,601 Credit Facility amortization of debt issuance costs 90 89 177 177 Acquisition debt 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 June 30, Six months ended June 30, 2026 2025 2026 2025 Acquisition debt imputed interest expense $ 112 $ 93 262 187 11. BUSINESS COMBINATIONS On May 27, 2026, we acquired a business consisting of one funeral home for approximately $ 4.5 million. We acquired substantially all of the assets and assumed certain operating liabilities of this business. The following table summarizes the breakdown of the preliminary purchase price allocation for the business described above (in thousands): Preliminary Purchase Price Allocation Current assets $ 58 Property, plant, and equipment 3,024 Goodwill 1,096 Intangible and other non-current assets 322 Purchase price $ 4,500 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. The primary reasons for the acquisition that contributed to the recognition of goodwill include the expansion of our footprint in strategic markets. The pro forma impact of this acquisition on prior periods is not presented, as the impact is not significant to our reported results. The results of the acquired business is reflected in our Condensed Consolidated Statements of Operations from the date of acquisition. 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 Condensed Consolidated Statements of Operations from the date of acquisition. 27 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 3,302 Preneed trust assets 4,068 Property, plant, and equipment 23,315 Cemetery property 2,733 Goodwill 37,746 Intangible and other non-current assets 3,222 Assumed liabilities ( 1,293 ) Preneed trust liabilities ( 4,068 ) Deferred revenue ( 12,526 ) Purchase price $ 56,499 The purchase price allocation was updated for immaterial measurement-period adjustments; no other material changes to the acquisition accounting were identified. 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. 28 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 related to the ATM Program, potential future sales thereunder, and the expected uses of proceeds thereof, including our ability to meet the expectations, timing and plans, if at all, related to the ATM Program; 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; • our ability to meet the timing, objectives, and expectations of our ATM Program, if at all, including the planned use of proceeds and the potentially dilutive effects to our shareholders of issuances of shares under the ATM Program; • 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 updated full year outlook, if at all; • the timely and full payment of death benefits related to preneed funeral contracts funded through life insurance contracts; 29 • 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; • 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 on 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; • military conflicts, acts of war or terrorists acts and the governmental or military response to such acts or conflicts; • 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, 2025. 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. 30