The SKY Has fallen on The Funeral Industry

The National Funeral Directors Association in a survey found The sale of preneed(Prepaid Funerals) policies to be down, Cremation up with the rise of the Lower Cost Casket Purchase. It has been long stated here that the guaranteed preneed is dead.

“A Web-based study conducted by the National Funeral Directors Association appears to back Kruger’s assertions that families are choosing less expensive caskets, and choosing cremation more often, and having reduced services and related events.

The study was conducted a year ago, said Jessica Koth, spokeswoman for the NFDA.

Nearly half of the national association members (or 48.9 percent) have experienced decreases in 2008 in the sales of “pre-need,” or pre-paid, funeral contracts compared to that of 2007, according to the study.

But more than half of the respondents, or 57.4 percent, of NFDA members said the economy has affected their existing pre-paid contracts, the study reads.”via www.ivpressonline.com

In the past the NFDA released  survey in formation on funeral cost to the general public. Not the case with this study.

In a recent  FUNERAL INDUSTRY forum post at Connecting Directors.Com I was accused of stating that the Sky is falling on the Funeral Industry, To which I replied “The Sky is not Falling  The SKY HAS FALLEN ON THE FUNERAL  INDUSTRY!

Within hours I was removed from the funeral forum at Connecting Directors.:-)

In 2009 THE SKY IS FALLING ON THE FUNERAL BUSINESS was brought home by the Overall Revenue Reports of the Big Three: Stewart Enterprises Inc, Service  Corporation International and Batesville Casket Company.

Funeral Industry|Funeral News| Funeral Blog by Your Funeral Guy.

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The World’s largest funeral corporation is trying to fund its purchase of Keystone(5th largest funeral corp) by selling “Notes”. This tact used by Hollinger International led by Conrad Black(now in a Canadian prison) has led many a company to it’s demise. The fact that Service Corporation International, SCI, NYSE:SCI, is having trouble funding this purchase shows that the World’s Largest Funeral Corporation Deep Pockets are gone.

It also is another sign of Funeral Industry decline.

"HOUSTON, Nov. 5 /PRNewswire-FirstCall/ -- Service Corporation
International
(NYSE: SCI) ("SCI"), which owns and operates funeral service
locations and
cemeteries, announced today that it has priced an
underwritten public offering
of $150.0 million of senior notes due 2021,
which will bear interest at a rate
of 8.00% per annum.  The notes are being sold at
98.115% of par, which equates
to an effective yield to maturity of approximately 8.25%.
 SCI expects to
close the sale of the notes on November 10, 2009,
 subject to the satisfaction
of customary closing conditions.  

SCI intends to use the net proceeds from the offering,
together with available
cash, to fund SCI's acquisition of Keystone North America Inc.
The offering is
being made under SCI's existing shelf registration
statement previously filed
with the Securities and Exchange Commission ("SEC")."
via www.reuters.com

Funeral Industry|Funeral Blog by Your Funeral Guy

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If the Funeral Industry crashes ......

The funeral industry is in decline. This can be seen by the latest numbers from Service Corporation International, SCI, NYSE:SCI. Worlds Largest Funeral Corporation loses millions again.

Millions and tens of millions of Service Corporation loss in dollars , in almost every category. SCI showed profits in the third quarter  by laying people off
and not paying overtime.

Revenue loses total about 19 million.

Revenues decreased to $497.2 million from $516.4 million last year. Analysts expected revenue of $480.73 million for the quarter.

via www.rttnews.com

Funeral Industry|Funeral blog by Your Funeral  Guy

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After Scandal after Scandal, Financial decline, and a national display of incompetence in the Ted Kennedy Funeral |Service-Corporation International went boasting today. They Brag about their superior management skills after a major purchase.

Service Corporation International Is doing Everyhing it can To Keep its big boss funeral reputation

With all that bad news it appears that Service Corporation International is determined to maintain its big Funeral Boss, Big Death, Big Cemetery,World’s Largest Funeral Corporation Status.
Google reported the Keystone North America Purchase to be $208 Million, Other sources say the purchase is for $256 Million.

SCI may be reviving it’s acquisition strategy to survive!

Here’s the Bragging:

As demonstrated with our purchase of Alderwoods in 2006, we have a proven capability of successfully integrating large acquisitions,” concluded Ryan. “I applaud the SCI team and thank them in advance for their efforts.”

Keystone President and CEO Steve Tidwell stated, “Clearly the potential of this business combination is compelling. With this enhanced operating platform and the combined talent of our two organizations, we believe we can grow this business segment organically and through strategic acquisitions at very reasonable prices, further leveraging our scale in pursuit of customers that value our services.”

“The migration of the Baby-Boomer generation to suburban and rural areas over the coming years will represent a significant opportunity for growth,” added SCI Executive Vice President and Chief Operating Officer Mike Webb. “This transaction and the addition of key members of the Keystone Management team, including President and CEO Steve Tidwell, will position us as the unparalleled leader in this market with over 500 businesses, generating more than $350 million in revenues and serving over 68,000 families per year.”

“Our current portfolio has over 300 similarly positioned businesses which consistently generate solid margins and predictable cash flows,” said SCI President and CEO Tom Ryan. “We believe the opportunity to nearly double our presence in this attractive segment through an accretive transaction will generate significant value for our shareholders.”

Keystone, headquartered in Tampa, Florida is North America’s 5th largest provider of death-care products and services with 199 funeral homes and 15 cemeteries operating in 31 states and the Province of Ontario, focusing specifically on the small to mid-size markets.

via www.prnewswire.com

Funeral Industry|Funeral Blog By Your Funeral Guy

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Service Corporation Dignity Logo

“Service Corporation International Corporation The World’s Largest Funeral Corporation  income is down significantly. The downward trend  continues and is further indication of a funeral industry decline.  Their own press release points to large losses. The CEO however as always tries to put a positive spin on what some call a continual disaster.

If you view the numbers they are not good, NYSE: SCI is spinning this out to the end of the galaxy.

From the company press release:

Comparable funeral revenue:
Atneed revenue                        $218.1    $232.3     $(14.2) loss over last year
Recognized preneed revenue             101.5     109.1       (7.6) loss over last year
Other funeral revenue(1)                17.1      17.2       (0.1)

Total comparable funeral revenues        $336.7    $358.6     $(21.9) loss over last year.

But most notably deferred revenue losses are not reported in the Q2 Press Release as they were in the Q1 press release.

Cemetery losses are just as dramatic.

Snippet From: www.transworldnews.com

Service Corporation International (NYSE: SCI) reported Thursday that the company reported a loss in second quarter earnings

The company, which deals with funeral, crematory and cemetery services…….Net income of $23.1 million, or 9 cents per share, was down 26 percent from $31.4 million, or 12 cents per share in the same quarter last year.

Excluding restructuring and other charges and a gain on eliminating debt, net income was $30 million, or 12 cents per share, down from $36.4 million, or 14 cents per share, in the second quarter of 2008.

Revenue for the period ended June 30 was $513.9 million, down 6 percent from $548.8 million in the year-earlier period.”

Some would say the company is headed toward a  financial death.

FUNERAL INDUSTRY|FUNERAL BLOG by Your Funeral Guy.

Dignity Logo Pic on flickr at

Jeremy Brooks’ photostream

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