Many people who were denied an expensive, well-attended funeral may choose to have a pricey memorial service once the pandemic passes and SCI is angling for that business. At SCI’s Cook-Walden Capital Parks Funeral Home and Cemetery in Pflugerville, Texas, for instance, manager Rick Davis invested in a transmitter that will broadcast AM radio signals a quarter mile, so that friends and family can come to a drive-in funeral, tune to 1600 AM, stay in their cars and listen together to a service before paying respects in a drive-by procession.Ĭurrently SCI isn’t charging customers for livestreaming services, but ultimately Ryan figures that livestreams are an add-on customers might be willing to pay around $300 for, and the option will be available even when social distancing is no longer necessary.ĭespite Ryan’s complaints about SCI’s revenue woes, there may be a silver lining. ![]() (In a bit of serendipity, SCI was already exploring livestreaming before the pandemic, inspired by Kobe Bryant’s livestreamed memorial.) They’re trying other things, too. Like most other funeral home operators, SCI now offers streaming services to accommodate grievers who can’t attend in person. And things could get much worse if the outbreak resurfaces and another wave of lockdowns ensues.īut the business is changing, perhaps for good. “Anything that interferes with the sale of burial plots is a turnoff,” he says of SCI, whose shares are down 25% from their all-time high in early March, compared to a 16% decline for the broader market. has reduced his 2020 earnings outlook 30% to about $260 million ($1.44 per share). According to Raymond James, because of coronavirus SCI’s top line could contract 14% in the second quarter. In 2019, the company posted $464 million in pretax profits, up 5% over 2018. Shares were up seven-fold since he became CEO in 2005. Up until the Covid-19 stock market crash, Ryan had presided over an incredible run. SCI handles many of the funeral operations at Arlington National Cemetery in Washington, D.C., including the funerals of presidents Reagan, Ford and Bush. Ryan made his own round of domestic acquisitions, including the San Francisco-based Neptune Society in 2011 and Stewart Enterprises of Louisiana (for $1.4 billion in 2013). He spent his early tenure cleaning up the balance-sheet mess left behind by founder Robert Waltrip, who began rolling up mom-and-pop funeral parlors in the 1960s before embarking on an ill-advised round of international acquisitions. by training, joined SCI 24 years ago as an accountant and became president in 2003. Ryan says SCI doesn’t do hazard pay, because extracting dead people from contagion zones like hospitals is an everyday job, but he is considering “hero pay.” To help overwhelmed New York City funeral homes, Ryan parachuted 28 morticians and funeral directors into the Big Apple, and has a team of 15 ready to head to New Orleans. ![]() It has tapped its network for booties, gowns, masks, gloves and face shields used by their body recovery teams and morticians and deploying them to coronavirus hot spots. In January, it acquired a half-dozen refrigerated trucks to deploy to COVID-19 hotspots. At the end of 2019, SCI had a $12 billion backlog in future revenues, with much of it invested in portfolios containing everything from stocks and bonds to private equity. ![]() Most of these funds aren’t recognized as revenue until they are needed, but SCI can-and does-use that money for working capital. Pre-need sales are critical to SCI in part because they generate reliable cash flow, which is held in trust for future services. ![]() Death may be on people’s minds right now, according to Ryan, but not many are in the mood to tour cemetery plots or select a headstone. According to Raymond James analyst John Ransom, “pre-need” cemetery plot sales are expected to decline to $158 million in the second quarter of 2020, from $226 million a year ago, down 30%. “We’re going to have some revenue pressures.”Īlso affected-so called pre-need sales, which are typically arranged by people well in advance of their actual death, most of which occur face-to-face with SCI’s salespeople. “A lot of people are going with fewer services than they may have planned for,” says Ryan.
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