"Imported Caskets Will Reach 10% Market Share Before They Peak" According to Industry Expert

• On 11:37 am EDT, Thursday August 27, 2009

67 WALL STREET, New York - August 27, 2009 - The Wall Street Transcript has just published its Funeral Services and Tax Preparation Report offering a timely review of the sector to serious investors and industry executives. This 57 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Estate Tax Planning - Death and Taxes - Tax Accounting Services - IRS Audit Targets - Cremation Market - Funeral Service Providers - Increasing Competition - Imported Chinese Caskets - Traditional Funeral Service - Membership Retention Rate - Funeral Trends - Potential of the Publicly Traded Companies - Public Funerals

Companies include: Intuit (INTU); Jackson Hewitt (JTX); H and R Block, Service (HRB); Gilman Ciocia (GTAX); Corporation International (SCI); Carriage Services (CSV); Keystone North America (KNA:TSX); Stewart Enterprises (STEI); Hillenbrand (HI); StoneMor (STON); Matthews International Corp. (MATW); Aurora Casket Company.

In the following brief excerpt from the 57 page report, Mr. Mark B. Allen, Executive Director of the Casket and Funeral Supply Association of America, discusses the outlook for the sector and for investors.

TWST: Please start off by talking a bit about the Casket and Funeral Supply Association of America?

Mr. Allen: CFSAA actually started as the Casket Manufacturers' Association in 1913. We've been around for quite some time. Its design is really to be an association to create professional standards amongst funeral suppliers and to be an information-delivering mechanism so that we can disperse information to all of our members and be a catalyst for networking among those members. We have a number of statistical reports that keep everybody informed about the status of the industry and where it's going. We also have a number of benefits that keep members current with industry trends, business strategies and regulatory concerns.

TWST: How many members do you have in total?

Mr. Allen: We have about 200 corporate members.

TWST: Are most of your members privately owned?

Mr. Allen: Most of them are privately owned. Only one of our members is publicly traded Matthews International (MATW). By and large, most funeral suppliers are family-owned or independently owned.

TWST: What are some of the biggest challenges facing your members right now?

Mr. Allen: Certainly, the preferences that families are bringing to funerals has had a big impact. Take for example, cremation. Cremation is nothing new; it's been expanding for a good 30 years now. But we are at the point now where that has really taken a bite out of the traditional funeral service. Our members, of course, are feeling that, in some cases dramatically, as they have to shift their business plans and their product mixes in order to accommodate that cremation market. Some of them are doing a good job of that, and some of them are responding more slowly.

TWST: Have you been able to track how much the trend toward cremation has affected your members financially?

Mr. Allen: It's hard to quantify that. We've heard a lot of anecdotal evidence, particularly since the economy took a downturn. We've heard that a lot of families who may have been on the fence of whether they would have chosen a traditional burial or cremation have gone on the side of cremation out of economic necessity. How that has impacted our members, we haven't fully determined yet. In terms of the overall quantity, of course, we are expecting to see a spike in the cremation statistics, but those cremation statistics lag about a year to a year and a half behind real time. So we won't have those definitive figures for a while, but I suspect that we will see a significant bump.

TWST: Let's focus on casket companies, as caskets are obviously a large part of the funeral business. How many different casket manufacturers are there in the United States?

Mr. Allen: According to the census data, there are about 140 casket manufacturers in the United States. To put that into perspective, in the early 1970s there were about 600 casket manufacturers. This has been an industry of steady consolidation.

TWST: How are the casket manufacturers and distributors facing the rising cremation market?

Mr. Allen: A lot of our members have quit trying to stop cremation. What some of them have done is to create products specifically to capture that cremation market. Others have said, "Okay, we are going to focus on what we do best." And that may be to provide customization and to personalize a casket for the traditional market. Some say they are going to do some things that are a little different and will really add value to that funeral by making a product that creates a memorable experience. We are seeing all sorts of customized caskets, whether it be the licensing sports or university logos on the casket or using nontraditional fabrics, paint techniques and other creative techniques to create something that is meaningful to the person that's being honored.

TWST: Competition can also be a big challenge for all suppliers, but casket companies in particular. How much do you think competition from the sale of caskets made in China and the like are affecting them?

Mr. Allen: Imports are something we are keeping a close eye on. At this point, about three percent of caskets sold in the United States are made in China. That doesn't sound like a lot, but about five years ago that would've been about one-tenth of 1%. So it has risen fairly dramatically in that time period and continues to do so. One of the issues that we are stressing to our members is the fact that imported caskets' competitive advantage is to mass produce a limited number of styles of caskets. That's where our members have a real competitive advantage because they can do much more of the customization and personalization of their products that importers are not equipped to do.

TWST: What would you say to investors looking at casket companies or funeral supply companies right now? Is there anything in particular they should keep in mind?

Mr. Allen: Investors need to look at the company's profile and look at what that company is projecting in terms of funeral trends. Is the company preparing for shifting funeral preferences; are they looking at how they can accommodate the cremation market; are they looking at green burials and how they might tap into that market before it emerges from its infancy; and are they looking at future trends and not just focusing on how they can maximize their market shares at this point? If they are doing those things, they have a good shot at achieving great success over the long term.

TWST: Thank you. (VRC)

MARK B. ALLEN Executive Director Casket and Funeral Supply Association of America 49 Sherwood Terrace Suite Y Lake Bluff, IL 60044-2231 (847) 295-6630 (847) 295-6647 - FAX www.cfsaa.orge - mail: mallen@cfsaa.org

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 57 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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