On Sept. 30, Carriage Services announced a comprehensive capital allocation framework designed to enhance long-term shareholder value per share, strengthen the company’s financial position and support the execution of its 2030 vision.
As part of the framework, Carriage is terminating its existing $100 million at-the-market equity offering program, effective Oct. 4, 2026.
“Our responsibility is not simply to grow Carriage. It is to create sustainable, long-term value on a per-share basis,” said Carlos Quezada, vice chairman and chief executive officer (pictured at top). “With the completion of our new credit facility, we have strengthened our liquidity and positioned Carriage to operate with greater financial flexibility. After listening to our shareholders’ concerns and evaluating our current valuation, free-cash-flow outlook and expected capital requirements, we concluded that maintaining the ATM program was not in the best interests of our shareholders.”
Quezada continued, “We do not believe issuing equity at current valuation levels appropriately reflects Carriage’s intrinsic value or our long-term earnings potential. This framework provides investors greater clarity regarding how we intend to deploy capital: investing in our businesses, strengthening our balance sheet, pursuing selective acquisitions, repurchasing shares and proactively managing our long-term capital structure. Given the company’s fundamentals and consistent performance over the past several years relative to the market’s recent valuation of our stock, we believe it is prudent to be positioned to repurchase shares when we believe a meaningful performance-to-valuation disconnect exists.”
In a separate news release, Carriage also announced that it has entered into a new $300 million revolving credit facility with a new bank syndicate led by JPMorgan Chase, replacing its existing $250 million facility. The new facility expands its banking relationships and is expected to strengthen Carriage’s liquidity and enhance its financial flexibility.
Read the news release on the new revolving credit facility.
A Disciplined Capital Allocation Hierarchy
Carriage’s capital allocation decisions will be guided by a fundamental objective: creating sustainable long-term value per share while maintaining a strong and appropriately capitalized balance sheet.
The company’s first priority is to fund the operating and strategic needs of its existing businesses. Beyond those investments, Carriage will balance debt reduction, selective acquisitions and share repurchases based on their expected returns, strategic value and impact on long-term value per share.
The increased capacity under the new credit facility is a source of financial flexibility, not a change in Carriage’s leverage philosophy. The company remains committed to disciplined leverage and strengthening its credit profile.
Share repurchases and acquisitions will therefore be balanced against Carriage’s leverage objectives and its priority of strengthening the company’s financial position well ahead of the maturity of its Senior Notes in May 2029.
Specifically, Carriage plans to allocate capital according to the following priorities.
Investing in Its Core Business
Carriage will continue to fund the maintenance and growth investments necessary to strengthen its existing businesses, deliver premier experiences to client families and support sustainable organic growth.
Capital will be directed toward opportunities that improve the performance of Carriage’s funeral homes and cemeteries, including new cemetery developments and inventory, as well as new systems and capabilities required to execute the company’s 2030 Vision.
Strengthening Its Balance Sheet and Capital Structure
Reducing leverage and strengthening the company’s credit profile remain central priorities.
A key objective of the framework is to position Carriage well in advance of the maturity of its $400 million of outstanding principal amount of 4.25% Senior Notes in May 2029. Through these efforts, the company intends to enhance its refinancing flexibility and position itself to achieve an attractive and sustainable cost of capital, consistent with prudent leverage and liquidity management.
Consistent with these objectives, Carriage is lowering its targeted leverage ratio range from 3.5x–4.0x to 3.0x–3.5x.
The company expects to progress toward this target through consistent operating performance, growth in Adjusted Consolidated EBITDA and free cash flow, disciplined debt reduction and prudent capital deployment.
The timing and structure of any future refinancing of Carriage’s senior notes due May 2029 will depend on the company’s operating performance and credit profile, prevailing market conditions, interest rates and other relevant considerations.
Continuing to Pursue Selective, High-Quality Acquisitions
Strategic acquisitions remain an important component of Carriage’s 2030 Vision. The company will continue to pursue premier businesses that demonstrate strong cultural and strategic alignment, sustainable earnings, attractive returns on invested capital and the ability to create long-term value per share.
Potential acquisitions will be evaluated against the company’s leverage, liquidity and capital-structure objectives. Carriage will not pursue growth for growth’s sake or undertake transactions that compromise its balance-sheet priorities.
The company intends to remain selective and disciplined, pursuing acquisitions when the strategic and financial merits justify the deployment of capital.
Continued Focus on Execution
Carriage remains focused on achieving its operating and financial commitments while advancing its 2030 Vision. The company expects to provide its next operating and financial update in connection with the release of its third-quarter results, at which time it will also provide an update regarding its ongoing strategic acquisition activities.
“The team at Carriage focuses on connecting intention with execution,” Quezada concluded. “This framework applies that same discipline to every dollar we deploy. We will invest in our businesses, deliver on our commitments, strengthen our balance sheet, prepare thoughtfully for our long-term capital needs, acquire premier businesses that meet our standards and repurchase our shares when we believe they represent an attractive investment.”
“We will remain flexible and intentional in allocating capital. Our objective is not growth for its own sake, nor is it simply debt reduction or share repurchases. Our objective is to deploy every dollar where we believe it can create the greatest sustainable long-term value per share, while maintaining the financial strength necessary to execute on our 2030 vision.”
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