CARRIAGE SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net income $ 51,507 $ 32,953 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 24,507 22,890 Provision for credit losses 3,576 3,351 Stock-based compensation expense 7,806 6,520 Deferred income tax expense (benefit) 3,980 (698 ) Amortization of intangibles 1,205 1,357 Amortization of debt issuance costs 512 622 Amortization and accretion of debt 563 539 Net loss on divestitures and impairment charges 371 2,580 Net gain on property damage, net of insurance claims — (417 ) Net gain on sale of excess real property (993 ) — Changes in operating assets and liabilities that provided (used) cash: Accounts and preneed receivables (28,151 ) (24,620 ) Inventories, prepaid, and other current assets (1,687 ) 1,056 Intangible and other non-current assets (3,547 ) (4,402 ) Preneed funeral and cemetery trust investments (17,724 ) 1,390 Accounts payable (369 ) 1,616 Accrued and other liabilities (1,764 ) 3,590 Deferred preneed funeral and cemetery revenue (1,752 ) 6,866 Deferred preneed funeral and cemetery receipts held in trust 22,653 (3,197 ) Net cash provided by operating activities 60,693 51,996 Cash flows from investing activities: Acquisitions of businesses and real property (59,026 ) — Capital expenditures (20,628 ) (16,098 ) Proceeds from divestitures and sale of other assets 44,483 12,057 Proceeds from insurance claims — 403 Net cash used in investing activities (35,171 ) (3,638 ) Cash flows from financing activities: Borrowings from the credit facility 137,525 54,900 Payments against the credit facility (147,825 ) (97,000 ) Payment of debt issuance costs for the credit facility — (781 ) Payments on acquisition debt and obligations under finance leases (1,116 ) (1,061 ) Proceeds from the exercise of stock options and employee stock purchase plan contributions 1,718 2,626 Taxes paid on restricted stock, performance award vestings, and exercise of stock options (8,276 ) (593 ) Dividends paid on common stock (7,025 ) (6,807 ) Net cash used in financing activities (24,999 ) (48,716 ) Net increase (decrease) in cash and cash equivalents 523 (358 ) Cash and cash equivalents at beginning of period 1,165 1,523 Cash and cash equivalents at end of period $ 1,688 $ 1,165 All statements made herein or elsewhere by us, or on our behalf, other than statements of historical information, should be deemed to be forward-looking statements, which include, but are not limited to, statements regarding any projections of earnings, revenue, cash flow, adjusted EBITDA, investment returns, capital allocation, debt levels, equity performance, death rates, market share growth, cost inflation, overhead, 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 conditions 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. 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; our ability to meet the timing, objectives, and expectations related to our 2030 Vision, 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 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, dividend increases, or share repurchases; 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 policies; 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; 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, 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; significant weather events, natural disasters, or catastrophic events; uncertainty around, and disruption from, new and emerging technologies, such as artificial intelligence (“AI”) and generative AI, and the failure to adapt or successfully incorporate such technologies into the Company's business; 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.
Author: Carriage Services, Inc.
Published at: 2026-02-25 22:31:00
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