Service Corporation International (NYSE: SCI) is North America’s largest provider of end-of-life arrangements and services. With its headquarters in Neartown, Houston, Texas, United States,[2][3] SCI operates more than 1500 funeral homes and 400 cemeteries in 43 states, eight Canadian provinces, and Puerto Rico.
Service Corporation International (SCI) is the largest owner and operator of funeral homes and cemeteries in the world. It operates over 2,500 funeral homes, some 460 cemeteries, and more than 150 crematoria. The company also does some related business in products like funeral urns, flowers, caskets, and burial garments. Most of its business is in the United States and Canada, though the company also maintains a substantial presence in Europe. The company helped consolidate the so-called death care industry, running formerly independent funeral homes in clusters that share personnel and equipment. In 2002, the company was still headed by its founder, Robert Waltrip. Waltrip envisioned the new direction of the formerly fragmented death care industry, and by the early 1990s he had grown his company to three times that of its next nearest competitor. At its peak, SCI owned more than 4,500 funeral homes and cemeteries, spread throughout 20 countries on five continents. As of 1999, the company began to shed acquisitions and focus on internal growth. The company still reaches approximately 75 percent of the population of the United States through its own network and franchised affiliates.
Service Corporation International (SCI), incorporated in July 1962, is a provider of deathcare products and services, with a network of funeral homes and cemeteries. As of December 31, 2010, SCI operated 1,417 funeral service locations and 381 cemeteries (including 218 funeral service/cemetery combination locations) in North America, which is geographically diversified across 43 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. The funeral segment also includes operations in Germany. The Company’s funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. It sells cemetery property and funeral and cemetery products and services at the time of need and on a preneed basis. In March 2010, SCI acquired Keystone North America, Inc .
SCI’s provides all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles and preparation and embalming services. Funeral-related merchandise, including caskets, casket memorialization products, burial vaults, cremation receptacles, cremation memorial products, flowers, and other ancillary products and services, is sold at funeral service locations. The Company’s cemeteries provide cemetery property interment rights, including mausoleum spaces, lots, and lawn crypts, and sell cemetery related merchandise and services, including stone and bronze memorials, markers, merchandise installations, and burial openings and closings. It also sells preneed funeral and cemetery products and services, whereby a customer contractually agrees to the terms of certain products and services to be delivered and performed in the future.
Funeral service/cemetery combination locations are those businesses, in which a funeral service location is located within or adjoining a cemetery that it owns. Combination locations allow certain facility, personnel, and equipment costs to be shared between the funeral service location and cemetery. With the acquisition of Alderwoods, the Company acquired Rose Hills, which is a combination operation in the United States, performing over 4,500 funeral services and 8,000 cemetery interments per annum. As of December 31, 2010, its operations in the United States and Canada were organized into 30 major markets, 45 metro markets, and 70 main street markets. Within each market, the funeral homes and cemeteries share common resources, such as personnel, preparation services, and vehicles. As of December 31, 2010, it owned approximately 92% of the real estate and buildings used at its facilities, and the remainders of the facilities were leased. As of December 31, 2010, its 381 cemeteries contained a total of approximately 26,852 acres, of which approximately 60% was developed.
The 1990s marked the beginning of a new era for SCI. Hollingsworth ended his long tenure as head of SCI in 1990, when L. William Heiligbrodt was named president and chief operating officer. Waltrip remained chairman and chief executive officer. The following year, SCI relocated its cemetery operations headquarters to Houston, so that the two parts of the businesses might operate more closely. The company also absorbed 182 acquired funeral homes, including three large businesses--Pierce Brothers, the Sentinel Group, and the Arlington Corporation. These were added to a group of 164 prestigious homes--including New York City's Frank E. Campbell and Riverside Memorial Chapel--and 18 cemeteries which have been recognized as among the finest heritage properties in the United States.
The SCI chain included over 1,500 funeral homes and cemeteries by the early 1990s, and the company had revenues of around $1.1 billion. The largest death services company in the United States by far, SCI began to acquire funeral homes abroad. SCI invested approximately $1 billion in the early 1990s for overseas expansion. It quickly snapped up leading funeral homes in France, England, and Australia and made inroads into other markets such as Italy, Singapore, and the Czech Republic. Though funeral customs were different country by country, Waltrip was sure that SCI's methods could work abroad as well. The cost of an American funeral had gone up substantially since the 1970s, tripling in price by the 1990s. Where more inexpensive funerals were the norm in England and France, SCI began offering a more lavish line of urns and caskets, not so much raising prices as making higher-priced options available. By mid-1996, it seemed that its operations abroad were working as planned. The company's overall funeral revenue rose 75 percent for the first quarter of 1996, and SCI's share price was trading at over $50.
Later that year, SCI made a hostile bid for the world's second-largest funeral home operator, the Canadian firm Loewen Group Inc. Loewen had imitated SCI's strategy of buying up North American funeral homes, and competition had driven the price of acquisitions up. There was apparently fierce animosity between Robert Waltrip and Loewen Group's founder Ray Loewen. Loewen, who controlled 15 percent of his company's stock, opposed the deal and began making more acquisitions and offering his top management expensive severance packages in order to drive up the cost of the merger. Several months after making its first offer, SCI withdrew, and Loewen went its own way. But SCI had been forced to dump some of its assets in order to fend off antitrust charges had the deal gone through.
By the late 1990s, it was clear that something had happened in the death services industry, and SCI was no longer the profitable company it had been. The company had had profit margins of around 25 percent since the late 1970s, while the death rate had gone up a steady 1 percent annually. But demographers noted by 1998 that the death rate was actually decreasing as advances in medical treatment allowed people to survive longer. This meant that SCI's market was now shrinking. And the long trend to consolidate in the funeral home industry had brought prices up so much that growth through acquisition was no longer as economical as it had been. In 1998, SCI actually broke up its management group that had spearheaded acquisitions, shifting executives into other areas. The company had lower than expected profits for the fourth quarter of that year. After its stock price dropped by more than 40 percent, SCI's president Heiligbrodt resigned. A string of top executives left the company in the next year, including Robert Waltrip's son. The company was led by Jerald Pullins in 1999, when SCI was named the worst one-year performer out of selected companies tracked by the Wall Street Journal. SCI's stock had fallen so low that an investment of $1000 in company stock at the beginning of 1999 would have been worth only $187 by the end of the year.
Pullins tried to streamline the company, bringing down the number of operating clusters in the United States to only 87, from 200. The company advised its funeral directors to push lower-cost funerals in order to keep consumers who might go elsewhere. SCI brought out a new program in 1999 called Dignity Memorial, which offered customers a one-price package deal at the low end of the price range. Meanwhile, the company had accumulated a load of debt because of its acquisitions. SCI discontinued paying dividends to stockholders in 1999 in order to address the debt problem, and it began selling off assets. In 2001, the company announced plans to sell over 400 funeral homes, as well as more than 100 cemeteries. Pullins articulated a three-part plan to turn the company around, with its first aim to pay down SCI's $3.3 billion debt and to increase cash flow and cut expenses.
Pullins resigned in July, 2002, and chairman Robert Waltrip took over his duties. Several weeks later, the company announced a succession plan, spelling out who would lead the company over the next several years. By that time, SCI had significantly pared its operations. Where it had once been active in 20 countries, it now operated in only eight. Its number of funeral homes had fallen almost by half, to around 2,500. Its nearest competitor, Loewen Group (now known as Alderwoods Group), was in bankruptcy proceedings, possibly having overcommitted itself after the hostile takeover bid. SCI endeavored to weather the hard times, planning future growth to emerge internally, instead of through acquisition. SCI began marketing its Dignity Memorial package as a national corporate brand name, giving its funeral homes a cohesive image they had not hitherto possessed.
Principal Subsidiaries: Equity Corp. International; SCI Financial Services Inc.
Principal Competitors: Stewart Enterprises, Inc.; Carriage Services, Inc.; Alderwoods Group Inc.
OVERALL
Beta: 1.65
Market Cap (Mil.): $2,796.43
Shares Outstanding (Mil.): 238.81
Annual Dividend: 0.20
Yield (%): 1.71
FINANCIALS
SCI Industry Sector
P/E (TTM): 21.71 17.69 37.56
EPS (TTM): 14.68 -- --
ROI: 1.54 3.24 8.52
ROE: 8.91 5.20 13.70
Statistics:
Public Company
Incorporated: 1962
Employees: 33,430
Sales: $2.51 billion (2001)
Stock Exchanges: New York
Ticker Symbol: SRV
NAIC: 812210 Funeral Homes and Funeral Services
Key Dates:
1962: Robert Waltrip incorporates SCI.
1970: The company goes public.
1974: SCI stock moves to the New York exchange.
1981: The company buys IFS Industries.
1990: Overseas expansion begins.
1996: SCI tries to take over competitor Loewen Group.
1999: The company's stock price declines to its lowest point.
Name Age Since Current Position
Robert Waltrip 80 2005 Chairman of the Board
Thomas Ryan 45 2005 President, Chief Executive Officer, Director
Eric Tanzberger 42 2007 Chief Financial Officer, Senior Vice President, Treasurer
Michael Webb 52 2005 Chief Operating Officer, Executive Vice President
Philip Jacobs 56 2007 Senior Vice President, Chief Marketing Officer
Gregory Sangalis 55 2007 Senior Vice President, General Counsel, Secretary
J. Daniel Garrison 59 2010 Senior Vice President - Sales
Stephen Mack 59 2004 Senior Vice President - Middle Market Operations
Sumner Waring 42 2010 Senior Vice President - Operations
Steven Tidwell 48 2010 Vice President - Main Street Market Operations
Tammy Moore 43 2010 Vice President, Corporate Controller
Jane Jones 55 2005 Vice President - Human Resources
Albert Lohse 50 2007 Vice President - Litigation and Risk Management
Elisabeth Nash 49 2010 Vice President - Operation Services
Joseph Hayes 54 2007 Vice President - Ethics and Business Conduct, Assistant General Counsel
John Mixon 47 2010 Vice President - Information Technology
John Faulk 35 2010 Vice President - Business Development
W. Blair Waltrip 56 2000 Director
John Mecom 70 1983 Director
Clifton Morris 74 1990 Director
Anthony Coelho 68 1991 Director
A. Foyt 75 1974 Director
Edward Williams 64 1991 Director
Victor Lund 63 2000 Director
Alan Buckwalter 64 2003 Director
Malcolm Gillis 69 2004 Director
Address:
1929 Allen Parkway
P.O. Box 130548
Houston, Texas 77019
U.S.A.
Service Corporation International (SCI) is the largest owner and operator of funeral homes and cemeteries in the world. It operates over 2,500 funeral homes, some 460 cemeteries, and more than 150 crematoria. The company also does some related business in products like funeral urns, flowers, caskets, and burial garments. Most of its business is in the United States and Canada, though the company also maintains a substantial presence in Europe. The company helped consolidate the so-called death care industry, running formerly independent funeral homes in clusters that share personnel and equipment. In 2002, the company was still headed by its founder, Robert Waltrip. Waltrip envisioned the new direction of the formerly fragmented death care industry, and by the early 1990s he had grown his company to three times that of its next nearest competitor. At its peak, SCI owned more than 4,500 funeral homes and cemeteries, spread throughout 20 countries on five continents. As of 1999, the company began to shed acquisitions and focus on internal growth. The company still reaches approximately 75 percent of the population of the United States through its own network and franchised affiliates.
Service Corporation International (SCI), incorporated in July 1962, is a provider of deathcare products and services, with a network of funeral homes and cemeteries. As of December 31, 2010, SCI operated 1,417 funeral service locations and 381 cemeteries (including 218 funeral service/cemetery combination locations) in North America, which is geographically diversified across 43 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. The funeral segment also includes operations in Germany. The Company’s funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. It sells cemetery property and funeral and cemetery products and services at the time of need and on a preneed basis. In March 2010, SCI acquired Keystone North America, Inc .
SCI’s provides all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles and preparation and embalming services. Funeral-related merchandise, including caskets, casket memorialization products, burial vaults, cremation receptacles, cremation memorial products, flowers, and other ancillary products and services, is sold at funeral service locations. The Company’s cemeteries provide cemetery property interment rights, including mausoleum spaces, lots, and lawn crypts, and sell cemetery related merchandise and services, including stone and bronze memorials, markers, merchandise installations, and burial openings and closings. It also sells preneed funeral and cemetery products and services, whereby a customer contractually agrees to the terms of certain products and services to be delivered and performed in the future.
Funeral service/cemetery combination locations are those businesses, in which a funeral service location is located within or adjoining a cemetery that it owns. Combination locations allow certain facility, personnel, and equipment costs to be shared between the funeral service location and cemetery. With the acquisition of Alderwoods, the Company acquired Rose Hills, which is a combination operation in the United States, performing over 4,500 funeral services and 8,000 cemetery interments per annum. As of December 31, 2010, its operations in the United States and Canada were organized into 30 major markets, 45 metro markets, and 70 main street markets. Within each market, the funeral homes and cemeteries share common resources, such as personnel, preparation services, and vehicles. As of December 31, 2010, it owned approximately 92% of the real estate and buildings used at its facilities, and the remainders of the facilities were leased. As of December 31, 2010, its 381 cemeteries contained a total of approximately 26,852 acres, of which approximately 60% was developed.
The 1990s marked the beginning of a new era for SCI. Hollingsworth ended his long tenure as head of SCI in 1990, when L. William Heiligbrodt was named president and chief operating officer. Waltrip remained chairman and chief executive officer. The following year, SCI relocated its cemetery operations headquarters to Houston, so that the two parts of the businesses might operate more closely. The company also absorbed 182 acquired funeral homes, including three large businesses--Pierce Brothers, the Sentinel Group, and the Arlington Corporation. These were added to a group of 164 prestigious homes--including New York City's Frank E. Campbell and Riverside Memorial Chapel--and 18 cemeteries which have been recognized as among the finest heritage properties in the United States.
The SCI chain included over 1,500 funeral homes and cemeteries by the early 1990s, and the company had revenues of around $1.1 billion. The largest death services company in the United States by far, SCI began to acquire funeral homes abroad. SCI invested approximately $1 billion in the early 1990s for overseas expansion. It quickly snapped up leading funeral homes in France, England, and Australia and made inroads into other markets such as Italy, Singapore, and the Czech Republic. Though funeral customs were different country by country, Waltrip was sure that SCI's methods could work abroad as well. The cost of an American funeral had gone up substantially since the 1970s, tripling in price by the 1990s. Where more inexpensive funerals were the norm in England and France, SCI began offering a more lavish line of urns and caskets, not so much raising prices as making higher-priced options available. By mid-1996, it seemed that its operations abroad were working as planned. The company's overall funeral revenue rose 75 percent for the first quarter of 1996, and SCI's share price was trading at over $50.
Later that year, SCI made a hostile bid for the world's second-largest funeral home operator, the Canadian firm Loewen Group Inc. Loewen had imitated SCI's strategy of buying up North American funeral homes, and competition had driven the price of acquisitions up. There was apparently fierce animosity between Robert Waltrip and Loewen Group's founder Ray Loewen. Loewen, who controlled 15 percent of his company's stock, opposed the deal and began making more acquisitions and offering his top management expensive severance packages in order to drive up the cost of the merger. Several months after making its first offer, SCI withdrew, and Loewen went its own way. But SCI had been forced to dump some of its assets in order to fend off antitrust charges had the deal gone through.
By the late 1990s, it was clear that something had happened in the death services industry, and SCI was no longer the profitable company it had been. The company had had profit margins of around 25 percent since the late 1970s, while the death rate had gone up a steady 1 percent annually. But demographers noted by 1998 that the death rate was actually decreasing as advances in medical treatment allowed people to survive longer. This meant that SCI's market was now shrinking. And the long trend to consolidate in the funeral home industry had brought prices up so much that growth through acquisition was no longer as economical as it had been. In 1998, SCI actually broke up its management group that had spearheaded acquisitions, shifting executives into other areas. The company had lower than expected profits for the fourth quarter of that year. After its stock price dropped by more than 40 percent, SCI's president Heiligbrodt resigned. A string of top executives left the company in the next year, including Robert Waltrip's son. The company was led by Jerald Pullins in 1999, when SCI was named the worst one-year performer out of selected companies tracked by the Wall Street Journal. SCI's stock had fallen so low that an investment of $1000 in company stock at the beginning of 1999 would have been worth only $187 by the end of the year.
Pullins tried to streamline the company, bringing down the number of operating clusters in the United States to only 87, from 200. The company advised its funeral directors to push lower-cost funerals in order to keep consumers who might go elsewhere. SCI brought out a new program in 1999 called Dignity Memorial, which offered customers a one-price package deal at the low end of the price range. Meanwhile, the company had accumulated a load of debt because of its acquisitions. SCI discontinued paying dividends to stockholders in 1999 in order to address the debt problem, and it began selling off assets. In 2001, the company announced plans to sell over 400 funeral homes, as well as more than 100 cemeteries. Pullins articulated a three-part plan to turn the company around, with its first aim to pay down SCI's $3.3 billion debt and to increase cash flow and cut expenses.
Pullins resigned in July, 2002, and chairman Robert Waltrip took over his duties. Several weeks later, the company announced a succession plan, spelling out who would lead the company over the next several years. By that time, SCI had significantly pared its operations. Where it had once been active in 20 countries, it now operated in only eight. Its number of funeral homes had fallen almost by half, to around 2,500. Its nearest competitor, Loewen Group (now known as Alderwoods Group), was in bankruptcy proceedings, possibly having overcommitted itself after the hostile takeover bid. SCI endeavored to weather the hard times, planning future growth to emerge internally, instead of through acquisition. SCI began marketing its Dignity Memorial package as a national corporate brand name, giving its funeral homes a cohesive image they had not hitherto possessed.
Principal Subsidiaries: Equity Corp. International; SCI Financial Services Inc.
Principal Competitors: Stewart Enterprises, Inc.; Carriage Services, Inc.; Alderwoods Group Inc.
OVERALL
Beta: 1.65
Market Cap (Mil.): $2,796.43
Shares Outstanding (Mil.): 238.81
Annual Dividend: 0.20
Yield (%): 1.71
FINANCIALS
SCI Industry Sector
P/E (TTM): 21.71 17.69 37.56
EPS (TTM): 14.68 -- --
ROI: 1.54 3.24 8.52
ROE: 8.91 5.20 13.70
Statistics:
Public Company
Incorporated: 1962
Employees: 33,430
Sales: $2.51 billion (2001)
Stock Exchanges: New York
Ticker Symbol: SRV
NAIC: 812210 Funeral Homes and Funeral Services
Key Dates:
1962: Robert Waltrip incorporates SCI.
1970: The company goes public.
1974: SCI stock moves to the New York exchange.
1981: The company buys IFS Industries.
1990: Overseas expansion begins.
1996: SCI tries to take over competitor Loewen Group.
1999: The company's stock price declines to its lowest point.
Name Age Since Current Position
Robert Waltrip 80 2005 Chairman of the Board
Thomas Ryan 45 2005 President, Chief Executive Officer, Director
Eric Tanzberger 42 2007 Chief Financial Officer, Senior Vice President, Treasurer
Michael Webb 52 2005 Chief Operating Officer, Executive Vice President
Philip Jacobs 56 2007 Senior Vice President, Chief Marketing Officer
Gregory Sangalis 55 2007 Senior Vice President, General Counsel, Secretary
J. Daniel Garrison 59 2010 Senior Vice President - Sales
Stephen Mack 59 2004 Senior Vice President - Middle Market Operations
Sumner Waring 42 2010 Senior Vice President - Operations
Steven Tidwell 48 2010 Vice President - Main Street Market Operations
Tammy Moore 43 2010 Vice President, Corporate Controller
Jane Jones 55 2005 Vice President - Human Resources
Albert Lohse 50 2007 Vice President - Litigation and Risk Management
Elisabeth Nash 49 2010 Vice President - Operation Services
Joseph Hayes 54 2007 Vice President - Ethics and Business Conduct, Assistant General Counsel
John Mixon 47 2010 Vice President - Information Technology
John Faulk 35 2010 Vice President - Business Development
W. Blair Waltrip 56 2000 Director
John Mecom 70 1983 Director
Clifton Morris 74 1990 Director
Anthony Coelho 68 1991 Director
A. Foyt 75 1974 Director
Edward Williams 64 1991 Director
Victor Lund 63 2000 Director
Alan Buckwalter 64 2003 Director
Malcolm Gillis 69 2004 Director
Address:
1929 Allen Parkway
P.O. Box 130548
Houston, Texas 77019
U.S.A.