Letter from our President,
Chairman, and CEO

Dear Shareholders,

In a year that will be remembered for its overwhelming challenges, our associates rose to the occasion in ways never seen before. Our entire SCI family can look back with pride on the innovative ways in which our teams stepped up to serve our customers, our communities, and each other during this very difficult period. Our team clearly demonstrated our culture of compassion and dedication at SCI as we remained focused on what we do best, which is helping our client families gain closure and healing through the process of grieving, remembrance, and celebration. The steadfast dedication, courage, and resilience of our team was nothing short of heroic and I have never been more proud to work with such an amazing team of individuals.

From the beginning of the pandemic, the health, safety and well-being of our SCI family was a top priority. Our dedicated teams on the front lines are first responders and provide essential services for our client families. We took immediate actions to protect our employees by securing Personal Protective Equipment (PPE) and implementing comprehensive health and safety protocols throughout our funeral homes and cemeteries to ensure the safety of our guests and associates. We are constantly monitoring our supply chain for PPE to ensure ongoing protection. Our corporate teams continue to work from home to reduce the risk of COVID-19 exposure, but their dedication to supporting our teams on the front-lines has never wavered. We will continue to take all feasible measures to ensure the peace of mind and well-being of our associates so they may fulfill their vital role in our communities.

One thing that became clear throughout 2020 is that our fundamental business has not changed. We did not see a wholesale shift in consumer preferences and our cremation rate remains stable. Although we were restricted in our ability to hold large gatherings in 2020, we heard loud and clear from our client families that they still want to memorialize and to celebrate. Although it was a challenging year, tools used and actions taken in response to the crisis will help us achieve and strengthen our strategy and long-term growth outlook. Our associates embraced creative ways to serve families and leveraged technology to help celebrate the lives of loved ones when physical gatherings were limited or prohibited by state, provincial, and local government mandates. Such endeavors included livestreaming of funeral services, hosting virtual arrangements with families, and holding funeral services outdoors under large canopies or via radio broadcast. As we continue to hold more outdoor funeral services, we recognize that this type of service is likely here to stay and are creating a comprehensive set of resources and best practices for funeral homes and cemeteries to hold outdoor services. Funeral directors and sales counselors continue to leverage virtual platforms to make arrangements and plan service details with families. Our sales counselors also found creative ways to engage with potential customers through our websites and social media. Although they may not always meet our client families face-to-face, our funeral directors and sales counselors continue to listen, understand, suggest, and plan important details for honoring a loved one’s life.

During the midst of a challenging year, we continued our focus on policies and strategies nurturing a more secure and inclusive workplace. In response, we proudly announce that we created two new Associate Resource Communities (ARCs) that bolster our culture of inclusion and diversity. In prior years, we formed a Veterans Associate Resource Community and an ARC advocating for our LGBTQ+ associates and communities. In 2020, we formed two new ARCs which provide support and advocacy for our Black and Hispanic associates. These associate-led groups will be instrumental in our ability to make a meaningful societal impact, respond authentically to issues of equity and social justice, make a positive difference for our associates, and improve our business.

I also recognize the dedication and compassion our associates have demonstrated for the communities we serve. In 2020, many of our associates in cities and towns across the country volunteered to travel to and provide assistance in areas hardest hit by COVID-19. With this added support in particularly hard hit areas, we were able to provide services for many individuals who were turned away from our competitors. Our associates also worked to support the communities that we serve through giving of their time, money and other resources. Our associates organized donation drives for blood, canned goods, pet food and school supplies – whatever they recognized was needed by their neighbors. And while our teams are considered first responders themselves, many took meals to public servants and medical personnel working tirelessly at local hospitals.

We were fortunate to enter this crisis with a strong balance sheet, which provided us with financial flexibility in 2020. This flexibility allowed us to avoid layoffs, mandatory furloughs, or reductions in pay for any employees except officers, as a result of the impact of COVID-19 and instead recognize the incredible efforts of our frontline associates with over $10 million awarded for HERO and special bonuses to every associate who is not eligible to participate in our annual incentive plan. Our financial flexibility also allowed us to invest in technologies to support a significantly higher number of services without disruption to our business, which highlights the power of our scale. Although this was a challenging and unique year, our long-term growth framework remains in place. Therefore, we will maintain focus on our core strategies of growing revenue by remaining relevant to our client families, leveraging our scale, and maximizing our capital deployment opportunities in a disciplined and balanced manner.

While there are many unknowns facing us in 2021, I am extremely optimistic about our future. Our team has proven what they are made of during this extraordinary time, and I believe our culture, as strong as it was before, is even stronger today. Our response to the COVID-19 crisis and our physical and digital presence have afforded us selective market share gains and have enabled our Company to further leverage our scale. The accelerated use of new technologies required to successfully meet customer needs during COVID-19 has provided many advantages and further differentiates us from our competitors. The adoption of new technology is increasing digital sales leads and producing a more effective and efficient sales model through enhanced use of our customer relationship management platform. In addition, we see an improvement in our relationship with our customers due to a dedicated focus on service excellence and honoring the details of every life we are privileged to serve, as well as enabling a seamless interaction with families through a bestin- class website experience. Our continued focus on service excellence during these trying times allowed continuous improvement in our ratings on social media outlets. Our reviews are a reflection of the ultimate service we provide.

Finally, let me say again to our entire SCI family, and particularly to our frontline associates, thank you for your courage and resolve, and for putting the safety of our client families, communities, and colleagues first. I see every one of our associates as true heroes in helping honor each life that has been lost through this past year and overcoming incredible odds every step of the way. All of the many learnings from this year will make us a better company going forward. As a result, we are positioned to enter the post pandemic world as a more agile and productive company.

Tom Ryan
President, Chairman, and CEO