Mr. Creedy: Trust 100 is actually celebrating its 30th year this year. At present, we are working in two separate divisions. We have a preneed marketing company, which subcontracts with funeral homes to market prepaid funerals to their customers. We are one of the largest in the country, and we have more than 300 funeral homes presently working with us. Some funeral homes use us as coaches/consultants with their own sales staff. Other funeral homes outsource the entire program to us, so that we manage it from soup to nuts. In this case, the staff members are our employees, and they are on our commission schedule. We've been doing that for 30 years. The other side is our consulting division, which I head up now. I've been involved in funeral service for that same 30 years, but not always with Trust 100. I started out as President of a very closely traded public company in the funeral home niche. When I left there, I went on to be the President of a large funeral home/cemetery combination operation here in North Carolina. I sold that to Service Corporation International (SCI) in 1991, and then that's when Trust 100 and I met up. I started with Trust 100 in 1991, and we built that company to be one of the premier marketing organizations.
TWST: Would you talk about the typical business model for funeral homes and
cemeteries?
Mr. Creedy: This is a business that is populated, I guess, almost 90% by
independently owned practitioners. You can call them moms and pops; over time
they are becoming increasingly sophisticated. Are they as sophisticated as many
publicly owned corporations that own funeral homes? No. But they are more
sophisticated than they were 20 years ago. They are moving up that learning
curve slowly but making the adaptations.
You will often hear that there are 23,000 funeral homes in United States. I
don't know how many cemeteries there are, but quite a few less than that. Of the
23,000 funeral homes, I'd say that about 15% to 18% are owned by public
companies. But those 23,000 in reality are really only rooftops. When you drill
down and want to look at the people who are on the radar screen, so to speak,
you want to talk about people that are doing more than 100 or 125 calls
(individual services) and, in those instances, many of them own multiple
rooftops. When you exclude publicly owned rooftops and firms serving less than
100 families, there are about 4,000 independent owners.
I am not counting the firms that do under 100 calls because I don't feel that
those firms are going to be here five and 10 years from now. It's not a
sustainable business model to do less than the 100 calls. When I first started
in 1980, a 50-call funeral home was about where a 100-call funeral home is today
in terms of viability and sustainability.
Let's talk about the non-public cemetery side. There are basically four types of
cemeteries: private cemeteries; cemetery associations, which are owned by their
lot owners, and there are municipal cemeteries, of course. The ones that are
available for acquisition are typically your private cemeteries. The fourth type
of cemetery is similar to the association model, and it is the church-owned
cemetery. The Catholic Church is very heavily involved. There are some other
churches that are very heavily involved in owning a cemetery, but it's a
religious organization. All association cemeteries and the religious ones are,
of course, non-profit.
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