By Thomas A. Parmalee

Sometimes, fate, luck, happenstance – or whatever you want to call it – puts you in exactly the right place at exactly the right time.

Whether it’s meeting your future spouse in line at a coffee shop, helping someone jump a car battery so they can get their daughter to soccer practice, or walking down the street and warning a boy on a bike to “look out” for that oncoming car, seemingly cosmic forces can make us feel like we are just actors in a play.

Steve Metzger, president of Carriage Services, whose legal acumen and entrepreneurial mind could have taken him to Wall Street, the executive ranks at Walmart or virtually anywhere else of his choosing, no doubt has felt a similar feeling as he’s marched up the ranks of funeral service.

After graduating with a juris doctor degree from the University of Texas School of Law, he could have gone straight to a big law firm and done litigation and trial work. But he knew he enjoyed “the business side” more than the courtroom, he said.

“That was a bigger interest of mine than I anticipated,” he said. “I decided to make the move to go in house and work with a company,” he said.

If truth be told, the first suitable position he saw when he went job hunting on a career website was for a company called Service Corporation International.

“I learned a little bit about the company and said, ‘Let me give it a shot,’” he said.

He landed the job and ended up working at the company for seven years.

“I had a really good experience at SCI,” he said. “But I was approached by an opportunity to get more responsibility and stretch myself a little bit. It was a tough decision, but I thought it was a good move for my career, so I went off and did that.”

But the company he joined – one outside funeral service – ended up being sold, and after a couple of years, he found himself in Denver working for a new employer.

That’s when he got a call from Carriage Services, which wanted to know if he’d be interested in exploring opportunities at the company.

“I said, ‘Thanks but no thanks,’” he said, noting that having just started a new job, it did not seem like the right time to try landing a new position.

“But Carriage is a very persistent brand,” he said. “And they continued to call and said, ‘Just fly down here and meet with the executive team.’”

He figured, what could it hurt?

“I did that mainly out of respect for the brand,” he said, noting he’d admired the company from afar while working at SCI. “Carriage has been around for so long.”

After that meeting in 2018, he was reminded very quickly of how special the funeral profession is. “I missed it more than I realized I did,” he said. “I was also very intrigued by Carriage Services.”

He ended up joining the company as lead counsel before being promoted to senior vice president and general counsel and then to executive vice president, chief administrative officer and general counsel and ultimately to president in June 2023.

The reason the company was so intriguing is that it had such a strong foundation but had not “quite hit its growth spurt in my opinion,” he said. And it still has not done so – there is so much potential growth ahead, he said.

“I thought this was a great opportunity to get in and help the company evolve a little bit,” he said. “To be part of a team and build the company for the future. Mel Payne (the co-founder and executive chairman of Carriage Services) had done a great job to get the company where it was.”

Metzger has no regrets about coming back to the profession.

“Everyone I have an opportunity to hire says the same thing … most think, ‘Is this really the industry I want to get into?’ But I tell them, once you get into it, you recognize it is a calling for people serving these families.”

Working in funeral service, he said, provides “a rare opportunity to have an impact on other people’s lives.”

His favorite part of the job, he said, is getting in the field and talking with the funeral directors on the front lines who work with families. “The opportunity to be part of a business where you have such a direct touchpoint on people’s lives is rare,” he said. “This is a business with a human connection.”

As for Carriage Services in particular, when he met Payne, he found him “incredibly dynamic.” He added, “He is among the most passionate in the industry – and he has a very sincere passion for what our men and women do out in the field. The more time you spend with him, the clearer it becomes that is what gets him excited about the business.”

He sees the same energy and commitment he saw in Payne in Carlos Quezada, who was named CEO of the company in June 2023. Interestingly enough, Metzger and Quezada worked at SCI at the same time earlier in their careers.

“I wish I could take credit for helping to recruit Carlos, but we never worked directly together at SCI,” he said. “That shows you what a big organization it is. But I was excited about being able to recruit him over to Carriage, and I did have a chance to interview him with other members of the executive team.”

Asked how his legal background has helped advance his career in funeral service, Metzger said it has provided a great foundation of critical thinking, strategic thinking and problem-solving skills. “It really prepares folks well to look at a situation from all angles,” he said. “If you combine that with an interest in business … then I think you are well suited to grow and become a contributor outside of just providing legal support.”

Steve Metzger
The Acquisition Front

While Carriage Services has a runway to grow, it first has to focus on “deleveraging the company” before shifting into that mode, Metzger said — a topic that was also a focus on its recent third-quarter earnings conference call.

That is “the sensible answer” for getting back to growth, he said. The debt the company has taken on must be paid down.

“We took on too much debt, so we are just focused on getting that to a level we are more comfortable with,” he explained. Asked how long that may take, he said 12 to 18 months would seem a reasonable timeframe, although that may be sped up or pushed back depending on the circumstances.

Whenever the company acquires a firm, Metzger considers himself fortunate to play a key role in the process. “I am one of the first on the ground to help evaluate the opportunity,” he said, noting he thoroughly enjoys leading business development efforts.

“There is a lot of opportunity to develop these folks and put them into key positions,” he said. “I am very focused on finding others who can do more than what is traditionally in the job description. I want to make sure we are developing and challenging these folks.”

If a presentation is put together for the executive team to look at, it means the team is “excited about it and has done some homework.” At that stage, buying the business is not a foregone conclusion “but we feel pretty strongly we’ll get the support we need,” he said, noting that there may be extended discussions about valuation and what is the responsible price to pay for the business. “We want to be competitive but responsible on the return on investment,” he said.

There is not always a specific multiple of earnings before interest, taxes, depreciation and amortization that Carriage Services has in mind in terms of what it will pay for a business, Metzger said. “Depending on the quality of the asset we are looking at, anything from 6 times to 8 times” is what is generally paid, he said. The higher multiples are paid for premium assets that have more growth potential, he said.

There is a lot of discussion about where the opportunities are for the business that may be acquired, he said. “If its best years are behind it, it is not the right asset for us,” he said. “But if there is opportunity for growth … if it has pricing power that it has not realized or if it is particularly attractive in terms of its growth profile, then we may be willing to pay up on the premium.”

Steve Metzger at the 2023 Carriage Health Fair and Family Day with colleagues.

As to where in the country Carriage Services wants to buy firms, it looks at where people in that 55-plus demographic are moving.

“So, when you look at our recent acquisitions, the three we have done most recently, one was just outside Orlando, and there was Charlotte and

Bakersfield, California,” he said.

While all those are different markets, they all have people in their later years moving there – higher than the national relocation average, he said. Charlotte and Bakersfield are entirely new markets for Carriage, which Metzger is excited about, he said.

A firm’s cremation rate is not always top of mind – but it’s important that a business is set up to serve cremation families, he said.

“I wouldn’t say we are seeking out high or low cremation businesses,” he said, explaining that it’s a bonus if a company has a crematory and “the capability to take on cremation.” He added, “We are not specifically looking to develop a cremation heavy business, but we want to be sure we can serve the cremation customer.”

“We really like cemeteries and have bought a lot of cemeteries recently,” he said. “We think there is a ton of opportunity for us in that area.”

Combination businesses – a cemetery and crematory or a funeral home with a cemetery – are the preference, but Carriage Services will also look at a standalone cemetery if a funeral home could potentially be built at or adjacent to the site or if the standalone cemetery is located near one of its existing locations. All of the cemeteries it has bought since 2019, however, have been combination operations, he said.

Staffing, the Funeral Rule and More

Another big opportunity – and one he sees himself playing a big role in at Carriage Services – is developing top talent. “There is a lot of opportunity to develop these folks and put them into key positions,” he said. “I am very focused on finding others who can do more than what is traditionally in the job description.”

Finding that top talent is a task Carriage Services takes very seriously, Metzger said.

“It starts with utilizing our network and relationships to identify talent,” he said. “And then keeping them here. We work very hard to create an environment where folks feel like they can grow and be developed – where we have a sense of community.”

The company also strives to provide opportunities to participate in the community outside the company, where employees can give back. “Not just in Houston but in our businesses across the country,” he said.

It’s also important to reward employees for a job well done, which includes compensation, he said.

Asked about the Federal Trade Commission’s review of the Funeral Rule, Metzger said he’s watching what unfolds closely.

“My own personal opinion? The Funeral Rule has been around since the early 1980s, and I don’t think we have experienced a significant problem or issue during that time,” he said. “My personal opinion is that it does not need to be updated – and I have not heard compelling arguments that would support that need.”

Like others, he’s paying particular attention to the talk about requiring funeral homes to post prices online, but he notes that many Carriage Services firms already do so. “I’m not sure if pricing transparency is an issue,” he said. “We have to hand out prices … but we are monitoring it closely like everyone else, and we will be prepared and ready to go (if there are any changes).”

On the subject of regulation throughout the industry, he thinks offering business owners flexibility is important.

“Being able to own a funeral home and cemetery in the same state is a good idea,” he said, noting all the synergies that come into play. “It would help to see some of these restrictions ease up a bit, offering more flexibility for funeral homes and cemetery owners.”

In some states, however, tough choices must be made, such as in Wisconsin, where a business like Carriage Services simply must make a strategic choice as to whether it wants to own funeral homes or cemeteries. “Which are the assets that make the most sense for my business?” he asked.

Staffing is another pressure point for the profession.

He referenced a recent meeting he attended with industry leaders and regulators where compelling arguments were made from both sides on whether certain states should continue to require licensed funeral directors to be able to embalm.

“I appreciate those who want to make sure the integrity of the license is not compromised by splitting it,” he said. “But I think you can do both,” he said, referring to making sure funeral directors have the skills and knowledge they need to serve families even if they have never embalmed a body.

Asked about what book he’s current reading, Metzger shared that he’s finding Arnold Schwarzenegger’s new book “Be Useful: Seven Tools for Life a compelling read.

“His focus really is on vision – creating vision for your life and having the discipline to make it happen,” he said.

One doesn’t have to look too hard at Steven Metzger to realize that he’s made creating and implementing that life vision for himself a priority.

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