Sudden Adult Death Syndrome (SADS) has been a part of global news coverage for at least a year. The unexpected deaths of adults, including young athletes in their peak, are ignored by federal healthcare regulators, yet the funeral market is reacting to the “unexplained” phenomenon with record profits.
Alex Berenson, a former New York Times reporter, reported on Wednesday on the latest communication between Service Corporation International (SCI), the largest for-profit funeral operator in North America, and its investors. As it appears, “so far in 2022 the company has made almost $500 million in profits,” wrote Berenson, and, after the published phone call on that, SCI’s stock rose 10 percent.
Eric D. Tanzberger, the chief financial officer and senior vice president of the company, described the company’s performance in 2022 as “very strong,” according to the transcript of the call.
“That’s going to revert to cash outflows related to ICP payments across the entire company in February [of 2023],” he told the investors, adding, “That would be close to 2 times even the targeted ranges.”
Thomas L. Ryan, SCI’s chairman, president, and CEO, plainly said that the uptick in revenues happened at “unheard of” rates:
If you go back in this industry and particularly with SCI, year-to-year you would see the numbers of deaths — probably in one year you may be down 1% or 2%, in the next year you’re up 1% or 2% … you could predict [with] pretty good accuracy over a year and over a big footprint like ours what was probably going to happen…. 2020 comes along, COVID, game-changer, right. We’re having to do at one point of time 20% more funerals which is unheard of in a year versus, let’s say, a year or two before.
Mr. Ryan went on to note that the expectation was for the death rate in 2022 to stabilize at the level of 2019 or slightly exceed it, yet, in reality, “the third quarter of this year, we did 15% more calls than we did in the third quarter of 2019. That is not what anybody would have anticipated and that has just a very de minimis amount of COVID deaths in it.”