UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year end December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-11961
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CARRIAGE SERVICES 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CARRIAGE SERVICES, INC.
1300 POST OAK BLVD., SUITE 1500 HOUSTON, TEXAS 77056
<PAGE>
REQUIRED INFORMATION
A. FINANCIAL STATEMENTS. The following financial statements are furnished
for the Plan.
1. Audited Statement of Net Assets Available for Benefits as of December
31, 1998 and 1997.
2. Audited Statement of Changes in Net Assets Available for Benefits for
the year ended December 31, 1998.
3. Notes to Financial Statements.
4. Schedules
(a) Assets Held for Investment Purposes
(b) Reportable Transactions
B. EXHIBITS
None
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
____________________
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE YEAR ENDED DECEMBER 31, 1998
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
TABLE OF CONTENTS
_______________
PAGE(S)
----------
Independent Accountants' Report 1
Financial Statements:
Statement of Net Assets Available for
Benefits as of December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available
for Benefits for the year ended December 31, 1998 3
Notes to Financial Statements 4-21
Supplemental Schedules:
Item 27a - Schedule of Assets Held for
Investment Purposes as of December 31, 1998 22
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998 23-24
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Carriage Services, Inc.:
We have audited the accompanying statement of net assets available for benefits
of the Carriage Services 401(k) Plan as of December 31, 1998 and 1997 and the
related statement of changes in net assets available for benefits for the year
ended December 31, 1998. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Carriage
Services 401(k) Plan as of December 31, 1998 and 1997, and the changes in net
assets available for benefits for the year ended December 31, 1998 in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes as of December 31, 1998 and reportable transactions for the
year ended December 31, 1998 are presented for purposes of additional analysis
and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Ham, Langston & Brezina, L.L.P.
Houston, Texas
June 13, 1999
-1-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
___________________
ASSETS 1998 1997
---------- ----------
Investments:
Registered investment companies (mutual
funds) at market value ....................... $4,276,620 $2,930,998
Great-West Life & Annuity Insurance
Company Guaranteed Certificate Funds,
at contract value ............................ -- 52,711
Carriage Services, Inc. Class A common
stock, 19,173.6711 shares, at market
value ........................................ 546,861 --
Participant loans receivable ..................... 89,369 109,112
Contributions receivable:
Employer ....................................... 28,203 125,302
Employee ....................................... 146,680 --
---------- ----------
Total assets ................................. 5,087,733 3,218,123
---------- ----------
LIABILITIES
Excess contributions payable ..................... 7,768 22,912
---------- ----------
Total liabilities .............................. 7,768 22,912
---------- ----------
Net assets available for benefits ............ $5,079,965 $3,195,211
========== ==========
The accompanying notes are an integral
part of these financial statements.
-2-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
__________________
Additions to net assets attributable to:
Investment income
Net appreciation in fair value
of investments ..................................... $ 452,922
Interest ............................................. 34,806
----------
Total investment income ............................ 487,728
----------
Contributions
Employer ............................................. 204,422
Participants ......................................... 1,384,157
Rollovers ............................................ 74,856
----------
Total contributions ................................ 1,663,435
----------
Total additions .................................. 2,151,163
Deductions from net assets attributable to:
Benefit payments ....................................... 258,641
Excess contributions ................................... 7,768
----------
Total deductions ................................. 266,409
----------
Net increase ............................................. 1,884,754
Net assets available for benefits,
beginning of year ...................................... 3,195,211
----------
Net assets available for benefits,
end of year ............................................ $5,079,965
==========
The accompanying notes are an integral
part of these financial statements.
-3-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
________________
1. DESCRIPTION OF PLAN:
The Carriage Services 401(k) Plan (the "Plan") was originally established
by Carriage Funeral Holding, Inc. (the "Company") through the adoption of
the Powell, Townsend & Associates, Inc. Regional Prototype 401(k) Plan and
Trust effective March 19, 1993. The Plan was amended and restated effective
January 1, 1998 upon adoption of the Travelers Insurance Company Flexible
Nonstandardized Safe Harbor Prototype 401(k) Profit Sharing Plan. The
restated plan provisions are not significantly changed from the Plan as
originally adopted. The Plan is a defined contribution, deferred
compensation and 401(k) plan under Section 401(k) of the Internal Revenue
Code (the "Code"). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
The Company has the right, under the Plan agreement, to terminate the Plan,
although the Company has no intention to do so. Upon termination, assets
would be distributed to the participants.
ELIGIBILITY AND CONTRIBUTION
Employees are eligible to participate in the Plan on the Plan entry date
immediately following the completion of one hour of service and attainment
of 21 years of age. Plan entry date is on January 1st or July 1st
immediately following employment and meeting the service requirements.
Participants may make an elective contribution on a tax-deferred basis of
up to 15 percent of total compensation, subject to certain limitations
provided for in the Code. The Company elected to contribute on behalf of
each participant an amount equal to 25 percent of the participant's
contribution up to 5 percent of the participant's compensation during 1998
and 1997.
Participant contributions include excess contributions which will be
refunded to participants subsequent to year-end as the contributions were
determined to be in excess of maximum contribution levels for certain
participants. A liability for excess contributions payable in the amount of
$7,768 and $22,912 has been reflected in the statements of net assets
available for benefits as of December 31, 1998 and 1997, respectively.
ALLOCATION OF EMPLOYER CONTRIBUTIONS
Each participant's account is credited with an allocation of employer
contributions based on the ratio that the participant's compensation for
the plan year bears to total compensation for all qualifying participants
during the plan year.
Continued
-4-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
________________
1. DESCRIPTION OF PLAN, CONTINUED
PARTICIPANT LOANS
A participant may borrow from the Plan in any amount greater than $1,000
but less than the lesser of $50,000 or 50 percent of the participant's
vested account balance. Loans are secured by the participant's vested
balance in his account. Repayments are made at least quarterly, and the
term cannot exceed five years, except in the case of a home loan, which can
extend up to 30 years. Participant loans outstanding as of December 31,
1998 and 1997 totaled $89,369 and $109,112, respectively. As of December
31, 1998 such participant loans bore interest at rates ranging from 10.25%
to 10.75% per year.
INVESTMENT OPTIONS
As of December 31, 1998, participants could direct the investment of their
accounts in the following investment options offered through the plan
custodian, Smith Barney Corporate Trust Company:
Founders Growth Fund - A mutual fund that invests in common stocks of
established companies with market capitalizations of greater than $500
million and with, in the view of the fund manager, an above average
prospect for growth.
Scudder Growth and Income Fund - A mutual fund with the investment
objective of long-term capital growth while providing current income and
growth in income. This fund invests primarily in common stocks and
convertible securities of companies that pay current dividends and that, in
the view of the fund manager, offer the prospect of growth of earnings.
Wasatch Advisors Growth Fund - A mutual fund with the investment objective
of aggressive growth. This fund invests primarily in common stock of
companies that, in the view of the fund manager, have superior growth
potential.
Lazard Small Capital Portfolio - A mutual fund with the investment
objective of outperforming the Russell 2000 Index. This fund invests
primarily in companies with market capitalization of less than $1 billion.
Brinson Global Equity Fund - A mutual fund that invests primarily in the
equity securities of major non-U.S. companies, with a concentration of
investment in Europe.
Continued
-5-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
________________
1. DESCRIPTION OF PLAN, CONTINUED
Montgomery Emerging Markets Fund - A mutual fund with the investment
objective of capital appreciation. The fund invests primarily in companies
operating in developing economies throughout the world.
Loomis Sayles Bond Retail Fund - A mutual fund with the investment
objective of high total investment return through a combination of current
income and capital appreciation. The fund invests primarily in debt
securities, although the purchase of preferred stocks is allowed.
Loomis Sayles Bond Fund - A mutual fund with the investment objective of
high total investment return through a combination of current income and
capital appreciation. The fund invests primarily in debt securities,
although the purchase of preferred stocks is allowed.
Dreyfus GNMA Fund - A mutual fund with the investment objective of
producing the highest level of current income which is consistent with
preservation of capital by investing principally in securities issued by
the Government National Mortgage Association ("GNMA").
Warburg Pincus Global Fixed Income Fund - A mutual fund with the investment
objective of maximum total return consistent with prudent investments. This
fund invests approximately 65% of assets in fixed income securities in at
least three countries.
MCM Stable Value Advisory Fund - A mutual fund with the investment
objective of total return consistent with low risk and liquidity. This fund
invests primarily in short to intermediate term debt securities.
Strong Government Securities Fund - A mutual fund with the investment
objective of producing high current income and total return by investing in
medium and longer term U.S. government securities. This fund invests only
in investment grade bonds.
Carriage Services, Inc. Class A Common Stock - Equity securities of the
Company.
Prior to April 3, 1998, Great-West Life and Annuity Insurance Company
("Great West") was the custodian of the Plan's assets and offered a total
of 34 investment options to participants.
Continued
-6-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
________________
1. DESCRIPTION OF PLAN, CONTINUED
VESTING
Participants are fully vested in their elective contributions. Employer
contributions are vested 100 percent upon participants attaining normal
retirement age (as defined by the Plan document). Prior to retirement age,
a participant's interest in employer contributions made in the
participant's behalf vest in accordance with the following schedule:
PERCENT OF
YEARS OF NONFORFEITABLE
SERVICE INTEREST
------------ --------------
Less than 1 0%
1 20
2 40
3 60
4 80
5 or more 100
For purposes of vesting, a year of service is 500 hours worked within a
single plan year. Forfeited balances of terminated participants' nonvested
accounts are used to reduce future employer contributions. Forfeited
amounts utilized to reduce employer contributions during 1998 were $5,981.
RETIREMENTS AND TERMINATIONS
In the case of a participant's retirement, death, permanent disability or
termination of employment, the participant or his designated beneficiary
may elect to receive the value of the participant account, in accordance
with the provisions of the Plan, in a lump-sum distribution, installment
payments or a combination thereof.
ADMINISTRATION
The Plan is administered by the Company. Two officers of the Company have
been appointed by the board of directors of the Company to act as trustees
and oversee the activities of the Plan. Certain administrative functions
are performed by officers or employees of the Company. No such officer or
employee receives compensation from the Plan. The custodian of the Plan's
assets is Smith Barney Corporate Trust Company ("Smith Barney").
All administrative costs, with the exception of loan set-up and maintenance
fees, are paid by the Company. Loan fees are paid by the participant.
Continued
-7-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
________________
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Plan's financial statements have been prepared on the accrual basis of
accounting.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
INVESTMENTS
Investments are carried at fair value based on quoted market prices in an
active market except for investment contracts, which are carried at
contract value.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of realized gains or losses and unrealized
appreciation (depreciation) on those investments.
3. INVESTMENTS IN REGISTERED INVESTMENT COMPANIES
Investments in registered investment companies ("mutual funds") consisted
of the following at December 31, 1998 and 1997:
CURRENT
DECEMBER 31, 1998 SHARES VALUE
------------------- ----------- -------------
Founders Growth Fund ..................... 41,331.8662 $ 843,583
Scudder Growth and Income Fund ........... 28,644.9341 753,648
Wasatch Advisors Growth Fund ............. 22,479.9811 439,875
Lazard Small Capital Portfolio ........... 24,709.8535 428,716
Brinson Global Equity Fund ............... 23,925.4392 289,976
Montgomery Emerging Markets Fund ......... 12,586.8195 100,443
Loomis Sayles Bond Fund .................. 4,996.5526 59,709
Loomis Sayles Bond Fund .................. 2,237.5399 25,813
Dreyfus GNMA Fund ........................ 7,081.0616 103,100
Warburg Pincus Global Fixed Income Fund .. 2,792.5808 29,601
MCM Stable Value Advisory Fund ........... 103,344.4502 1,073,318
Strong Government Securities Fund ........ 11,973.7536 128,838
-------------
Total at December 31, 1998 ............. $ 4,276,620
=============
Continued
-8-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_________________
3. INVESTMENTS IN REGISTERED INVESTMENT COMPANIES, CONTINUED
<TABLE>
<CAPTION>
CURRENT
DECEMBER 31, 1997 SHARES VALUE
------------------- ----------- -----------
<S> <C> <C>
American Century Ultra Growth Fund ........... 11,436.109794 $ 286,565
AIM Constellation Fund ....................... 10,105.162189 264,876
Maxim Small Capital Index Fund ............... 2,151.294719 34,858
Maxim Growth Index Fund ...................... 3,564.443282 74,618
Maxim Small Capital Aggressive Growth Fund ... 2,932.788291 55,033
Maxim U.S. Government Mortgage Securities Fund 4,329.660290 63,123
Maxim Investment Grade Corporate Bond Fund ... 2,639.516269 74,557
Maxim Corporate Bond Fund .................... 1,087.380493 15,959
Putnam Global Governmental Income Fund ....... 1,212.384367 13,431
Maxim Short-Term Maturity Bond Fund .......... 340.787276 3,785
Fidelity Advisor Growth Opportunity Fund ..... 8,293.920873 156,178
Maxim Stock Index Fund ....................... 2,755.314242 158,666
AIM Weingarten Fund .......................... 8,465.264285 180,068
Maxim Small Capital Value Fund ............... 642.271311 10,680
Maxim Mid Capital Fund ....................... 21.103818 233
Maxim Blue Chip Fund ......................... 2,757.820794 47,898
AIM Charter Fund ............................. 7,114.745267 154,360
Maxim Value Index Fund ....................... 1,150.663323 23,907
Putnam Fund for Growth and Income ............ 8,535.960962 135,430
Fidelity Advisor Equity Income Fund .......... 882.439965 13,529
Putnam Global Growth Fund .................... 7,248.961121 109,073
Maxim Foreign Equities Fund .................. 1,614.433404 18,277
Fidelity Advisor Overseas Fund ............... 735.234908 8,885
Orchard Index Pacific Fund ................... 1.770692 13
Orchard Index European Fund .................. 1.458128 15
Maxim Money Market Fund ...................... 6,971.819670 127,572
Great-West Profile Series Fund I ............. 16,445.884945 289,248
Great-West Profile Series Fund II ............ 28,504.760157 470,086
Great-West Profile Series Fund III ........... 4,859.378562 74,849
Great-West Profile Series Fund IV ............ 3,939.495169 56,683
Great-West Profile Series Fund V ............. 641.112616 8,543
-------------
Total at December 31, 1997 ................. $ 2,930,998
=============
</TABLE>
Continued
-9-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_____________
4. RISKS AND UNCERTAINTIES
CREDIT RISK
The Plan provides for various investments in mutual funds. Investment
securities, in general, are exposed to various risks, such as interest
rate, credit and overall market volatility risk. Due to the level of risk
associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near
term and that such changes could materially affect the amounts reported in
the statements of net assets available for plan benefits and the amounts
reported in participant accounts.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs and hardware with
embedded date technology using two digits to define the applicable year
rather than four. Any programs or hardware that are time sensitive and have
not been determined to be Year 2000 compliant may recognize a date using
"00" as the year 1900 rather than the year 2000. Such improper date
recognition could, in turn, result in erroneous processing of data, or, in
extreme situations, system failure.
In anticipation of the Year 2000 issue, both the Company and the Custodian
implemented Year 2000 programs which included the performance of
inventories of information technology and non-information technology
systems, assessments of potential problem areas, testing of systems for
Year 2000 readiness, and modification of systems that are not Year 2000
compliant.
The Company and the Custodian believe all of their core systems are Year
2000 compliant.
Although the Company and the Custodian expect to be ready to continue
business activities without interruption by a Year 2000 problem, each
recognizes the general uncertainty inherent in the Year 2000 issue, in part
because of the uncertainty about the Year 2000 readiness of third parties.
Under a "worst case Year 2000 scenario", it may be necessary to temporarily
interrupt normal plan activities. The Trustees do not believe that such
circumstances would result in a material adverse impact on Plan operations.
The Company and the Custodian have begun, but not yet completed,
development of contingency plans to deal with the "most likely worst case
Year 2000 scenario". The contingency plans are expected to be completed
during the third quarter of 1999.
Continued
-10-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_______________
4. RISKS AND UNCERTAINTIES, CONTINUED
IMPACT OF THE YEAR 2000 ISSUE, CONTINUED
The cost of becoming Year 2000 compliant is not expected to be significant
and such cost will be borne by the Company and the Custodian.
5. TAX STATUS
On April 29, 1995, the Plan received a favorable determination letter from
the Internal Revenue Service (the "IRS"). Subsequent to the date of that
original letter, the Company adopted an amendment and restatement of the
Plan and has requested a determination letter covering the restated plan.
The trustees believe that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Code. Therefore, the
trustees believe that the Plan is qualified and the related trust is
tax-exempt as of December 31, 1998 and 1997.
6. PLAN INVESTMENTS
Following is an analysis of plan activity by investment option for the year
ended December 31, 1998:
Continued
-11-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_______________
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
AMERICAN
GREAT-WEST CENTURY AIM
GUARANTEED CERTIFICATE FUND ULTRA CONSTEL-
36 MONTH 60 MONTH 84 MONTH GROWTH LATION
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ........... $ 44,720 $ 3,919 $ 4,072 $ 283,628 $ 263,198
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ...................... -- -- -- 53,665 34,475
Interest income ....................... 514 44 55 -- --
Employer contributions ................ -- -- -- -- --
Participant contributions ............. 1,322 132 132 17,573 17,293
Rollovers ............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ..................... 1,836 176 187 71,238 51,768
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ...................... -- -- -- -- --
Excess contributions .................. -- -- -- -- --
--------- --------- --------- --------- ---------
Total deductions .................... -- -- -- -- --
--------- --------- --------- --------- ---------
Transfers, net .......................... (46,556) (4,095) (4,259) (354,866) (314,966)
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 ......... $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
</TABLE>
Continued
-12-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
MAXIM MAXIM
MAXIM SMALL MAXIM INVESTMENT
SMALL MAXIM CAPITAL U.S. GOVT GRADE
CAPITAL GROWTH AGGRESSIVE MORTGAGE CORPORATE
INDEX INDEX GROWTH SECURITIES SECURITIES
-------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ........... $ 34,236 $ 73,726 $ 52,177 $ 63,123 $ 73,984
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ...................... 3,833 12,024 6,666 935 968
Interest income ....................... -- -- -- -- --
Employer contributions ................ -- -- -- -- --
Participant contributions ............. 4,620 3,536 10,091 2,188 1,620
Rollovers ............................. -- -- -- -- --
-------- -------- -------- -------- --------
Total additions ..................... 8,453 15,560 16,757 3,123 2,588
-------- -------- -------- -------- --------
Deductions from net assets attributed to:
Benefit payments ...................... -- -- -- -- --
Excess contributions .................. -- -- -- -- --
-------- -------- -------- -------- --------
Total deductions .................... -- -- -- -- --
-------- -------- -------- -------- --------
Transfers, net .......................... (42,689) (89,286) (68,934) (66,246) (76,572)
-------- -------- -------- -------- --------
Net assets available for plan
benefits at December 31, 1998 ......... $ -- $ -- $ -- $ -- $ --
======== ======== ======== ======== ========
</TABLE>
Continued
-13-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
PUTNAM MAXIM
GLOBAL SHORT- FIDELITY
MAXIM GOVERN- TERM ADVISORS MAXIM
CORPORATE MENTAL MATURITY GROWTH STOCK
BOND INCOME BOND OPPORTUNITY INDEX
--------- --------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ..................... $ 15,441 $ 13,042 $ 3,785 $ 154,812 $ 157,320
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................ 647 (137) 52 16,918 25,369
Interest income ................................. -- -- -- -- --
Employer contributions .......................... -- -- -- -- --
Participant contributions ....................... 1,914 1,263 814 8,214 8,166
Rollovers ....................................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ............................... 2,561 1,126 866 25,132 33,535
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................ -- -- -- -- --
Excess contributions ............................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total deductions .............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Transfers, net .................................... (18,002) (14,168) (4,651) (179,944) (190,855)
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 ................... $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
</TABLE>
Continued
-14-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
MAXIM
SMALL MAXIM MAXIM
AIM CAPITAL MID BLUE AIM
WEINGARTEN VALUE CAPITAL CHIP CHARTER
------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ..................... $ 179,839 $ 10,431 $ 216 $ 47,898 $ 154,360
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................ 27,723 969 99 5,608 20,462
Interest income ................................. -- -- -- -- --
Employer contributions .......................... -- -- -- -- --
Participant contributions ....................... 8,038 1,025 404 1,834 5,347
Rollovers ....................................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ............................... 35,761 1,994 503 7,442 25,809
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................ -- -- -- -- --
Excess contributions ............................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total deductions .............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Transfers, net .................................... (215,600) (12,425) (719) (55,340) (180,169)
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 ................... $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
</TABLE>
Continued
-15-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
PUTNAM
FUND FOR
MAXIM GROWTH FIDELITY PUTNAM MAXIM
VALUE AND ADVISOR GLOBAL FOREIGN
INDEX INCOME EQUITY GROWTH EQUITIES
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ..................... $ 23,907 $ 135,411 $ 13,529 $ 108,052 $ 17,889
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................ 3,704 17,659 2,368 19,778 2,861
Interest income ................................. -- -- -- -- --
Employer contributions .......................... -- -- -- -- --
Participant contributions ....................... 3,921 14,423 2,810 14,260 1,649
Rollovers ....................................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ............................... 7,625 32,082 5,178 34,038 4,510
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................ -- -- -- -- --
Excess contributions ............................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total deductions .............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Transfers, net .................................... (31,532) (167,493) (18,707) (142,090) (22,399)
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 ................... $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
</TABLE>
Continued
-16-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
GREAT-
FIDELITY ORCHARD ORCHARD MAXIM WEST
ADVISOR INDEX INDEX MONEY PROFILE
OVERSEAS PACIFIC EUROPEAN MARKET SERIES I
------------ ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ..................... $ 8,885 $ 13 $ 15 $ 127,572 $ 284,156
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................ 1,474 (2) 140 1,322 42,610
Interest income ................................. -- -- -- -- --
Employer contributions .......................... -- -- -- -- --
Participant contributions ....................... 1,958 18 142 8,846 27,584
Rollovers ....................................... -- -- -- -- 921
--------- --------- --------- --------- ---------
Total additions ............................... 3,432 16 282 10,168 71,115
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................ -- -- -- -- --
Excess contributions ............................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total deductions .............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Transfers, net .................................... (12,317) (29) (297) (137,740) (355,271)
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 ................... $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
</TABLE>
Continued
-17-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_____________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
GREAT- GREAT- GREAT- GREAT-
WEST WEST WEST WEST
PROFILE PROFILE PROFILE PROFILE FOUNDERS
SERIES II SERIES III SERIES IV SERIES V GROWTH
----------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ...................... $ 469,488 $ 72,834 $ 56,576 $ 8,543 $ --
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................. 54,023 7,593 3,899 344 78,085
Interest income .................................. -- -- -- -- --
Employer contributions ........................... -- -- -- -- 53,131
Participant contributions ........................ 15,576 15,737 6,085 281 193,657
Rollovers ........................................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ................................ 69,599 23,330 9,984 625 324,873
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................. -- -- -- -- 13,301
Excess contributions ............................. -- -- -- -- 1,343
--------- --------- --------- --------- ---------
Total deductions ............................... -- -- -- -- 14,644
--------- --------- --------- --------- ---------
Transfers, net ..................................... (539,087) (96,164) (66,560) (9,168) 532,011
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 .................... $ -- $ -- $ -- $ -- $ 842,240
========= ========= ========= ========= =========
</TABLE>
Continued
-18-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_____________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
SCUDDER LAZARD
GROWTH WASATCH SMALL BRINSON MONTGOMERY
AND ADVISORS CAPITAL GLOBAL EMERGING
INCOME GROWTH PORTFOLIO EQUITY MARKETS
------------ ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ...................... $ -- $ -- $ -- $ -- $ --
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments ................................. (20,651) (20,040) (77,869) 4,922 (32,272)
Interest income .................................. -- -- -- -- --
Employer contributions ........................... 53,469 32,588 36,973 17,667 7,360
Participant contributions ........................ 198,716 117,605 124,270 67,466 27,129
Rollovers ........................................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total additions ................................ 231,534 130,153 83,374 90,055 2,217
--------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Benefit payments ................................. 12,989 6,765 7,298 2,755 3,038
Excess contributions ............................. 639 1,277 2,957 869 323
--------- --------- --------- --------- ---------
Total deductions ............................... 13,628 8,042 10,255 3,624 3,361
--------- --------- --------- --------- ---------
Transfers, net ..................................... 535,103 316,487 352,640 202,676 101,264
--------- --------- --------- --------- ---------
Net assets available for plan
benefits at December 31, 1998 .................... $ 753,009 $ 438,598 $ 425,759 $ 289,107 $ 100,120
========= ========= ========= ========= =========
</TABLE>
Continued
-19-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
______________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
WARBURG
LOOMIS PINCUS MCM
SAYLES LOOMIS GLOBAL STABLE
BOND SAYLES DREYFUS FIXED VALUE
RETAIL BOND GNMA INCOME ADVISORY
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ................... $ -- $ -- $ -- $ -- $ --
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments .............................. (49) (134) 2,104 972 44,668
Interest income ............................... -- -- -- -- 14,284
Employer contributions ........................ -- 5,667 6,763 1,664 60,843
Participant contributions ..................... -- 20,122 27,785 6,698 143,204
Rollovers ..................................... -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total additions ............................. (49) 25,655 36,652 9,334 262,999
---------- ---------- ---------- ---------- ----------
Deductions from net assets attributed to:
Benefit payments .............................. 1,371 372 17,934 111 167,562
Excess contributions .......................... -- -- -- -- 286
---------- ---------- ---------- ---------- ----------
Total deductions ............................ 1,371 372 17,934 111 167,848
---------- ---------- ---------- ---------- ----------
Transfers, net .................................. 61,129 530 84,382 20,378 977,881
---------- ---------- ---------- ---------- ----------
Net assets available for plan
benefits at December 31, 1998 ................. $ 59,709 $ 25,813 $ 103,100 $ 29,601 $1,073,032
========== ========== ========== ========== ==========
</TABLE>
Continued
-20-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
_____________
6. PLAN INVESTMENTS, CONTINUED:
<TABLE>
<CAPTION>
STRONG CARRIAGE
GOVERNMENT SERVICES LOAN
SECURITIES STOCK FUND OTHER TOTAL
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at January 1, 1998 ................... $ -- $ -- $ 109,112 $ 125,302 $3,195,211
Additions to net assets attri-
buted to:
Net appreciation in market value
of investments .............................. 5,229 106,047 -- (6,139) 452,922
Interest income ............................... -- -- 19,909 -- 34,806
Employer contributions ........................ 5,841 27,323 -- (104,867) 204,422
Participant contributions ..................... 22,038 79,971 -- 146,680 1,384,157
Rollovers ..................................... -- 73,935 -- -- 74,856
---------- ---------- ---------- ---------- ----------
Total additions ............................. 33,108 287,276 19,909 35,674 2,151,163
---------- ---------- ---------- ---------- ----------
Deductions from net assets attributed to:
Benefit payments .............................. 7,821 2,492 14,832 -- 258,641
Excess contributions .......................... -- 74 -- -- 7,768
---------- ---------- ---------- ---------- ----------
Total deductions ............................ 7,821 2,566 14,832 -- 266,409
---------- ---------- ---------- ---------- ----------
Transfers, net .................................. 103,551 262,077 (24,820) 13,907 --
---------- ---------- ---------- ---------- ----------
Net assets available for plan
benefits at December 31, 1998 ................. $ 128,838 $ 546,787 $ 89,369 $ 174,883 $5,079,965
========== ========== ========== ========== ==========
</TABLE>
-21-
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
EIN: 76-0339922
PN: 001
<TABLE>
<CAPTION>
NET
UNREALIZED
NUMBER CURRENT GAIN
DESCRIPTION OF ASSET OF SHARES COST VALUE (LOSS)
- -------------------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
Investments held in custody
of Salomon Smith Barney, Inc.:
Registered Investment Companies:
Founders Growth Fund 41,331.8662 $ 764,813 $ 843,583 $ 78,770
Scudder Growth and Income Fund 28,644.9341 771,357 753,648 (17,709)
Wasatch Advisors Growth Fund 22,479.9811 456,421 439,875 (16,546)
Lazard Small Capital Portfolio 24,709.8535 498,653 428,716 (69,937)
Brinson Global Equity Fund 23,925.4392 284,616 289,976 5,360
Montgomery Emerging Markets Fund 12,586.8195 140,881 100,443 (40,438)
Loomis Sayles Bond Retail Fund 4,996.5526 59,604 59,709 105
Loomis Sayles Bond Fund 2,237.5399 25,889 25,813 (76)
Dreyfus GNMA Fund 7,081.0616 100,909 103,100 2,191
Warburg Pincus Global Fixed
Income Fund 2,792.5808 28,767 29,601 834
MCM Stable Value Advisory Fund 103,344.8502 1,038,613 1,073,318 34,705
Strong Government Securities Fund 11,973.7536 123,735 128,838 5,103
Common Stock - Carriage Services, Inc. 19,173.6711 441,165 546,861 105,696
Participant Loans (bearing interest
at rates ranging from 10.25% to 10.75%) - 89,369 89,369 -
---------- ---------- ----------
Total assets held for investment
purposes $4,824,792 $4,912,850 $ 88,058
========== ========== ==========
</TABLE>
-22-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 76-0339922
PN: 001
<TABLE>
<CAPTION>
PURCHASE/ MARKET NET
NUMBER SALES VALUE/ GAIN/
DESCRIPTION OF ASSET OF SHARES PRICE COST (LOSS)
- -------------------- ------------------- ---------------- -------------- -----------
<S> <C> <C> <C> <C>
PURCHASES
Investments held in custody of Salomon
Smith Barney, Inc.:
Founders Growth Fund 43,451.253000 $ 893,228 $ 893,228 $ -
Scudder Growth and Income Fund 30,546.360400 944,905 944,905 -
Wasatch Advisors Growth Fund 23,513.466400 517,461 517,461 -
Lazard Small Capital Portfolio 26,529.413700 577,454 577,454 -
Brinson Global Equity Fund 25,510.469900 329,644 329,644 -
MCM Stable Value Advisory Fund 494,259.975800 8,858,655 8,858,655 -
Cash Investments 4,000,053.780000 4,000,054 4,000,054 -
Carriage Services, Inc. Common Stock 19,355.522800 446,829 446,829 -
Investments held in custody of Great-West
Life & Annuity Insurance Company:
Aggressive Growth Funds:
American Century Ultra Growth Fund 837.621333 21,215 21,215 -
AIM Constellation Fund 680.306729 17,932 17,932 -
Growth Funds:
Fidelity Advisor Growth Opportunity Fund 482.951897 9,263 9,263 -
Maxim Stock Index Fund 180.479703 10,673 10,673 -
AIM Weingarten Fund 383.322436 8,330 8,330 -
Growth and Income Funds:
AIM Charter Fund 263.035796 5,799 5,799 -
Putnam Fund For Growth and Income 935.942721 15,059 15,059 -
International Funds:
Putnam Global Growth Fund 981.439749 15,087 15,087 -
Money Market Fund:
Maxim Money Market Fund 515.747910 9,471 9,471 -
Profile Funds:
Great-West Profile Series I 1,677.958094 30,137 30,137 -
Great-West Profile Series II 1,740.837791 27,333 27,333 -
</TABLE>
Continued
-23-
<PAGE>
CARRIAGE SERVICES 401(K) PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS, CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 76-0339922
PN: 001
<TABLE>
<CAPTION>
PURCHASE/ MARKET NET
NUMBER SALES VALUE/ GAIN/
DESCRIPTION OF ASSET OF SHARES PRICE COST (LOSS)
- -------------------- ------------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
SALES
Investments held in custody of Salomon
Smith Barney, Inc.:
Founders Growth Fund 2,119.386800 $ 41,567 $ 42,252 $ (685)
Scudder Growth and Income Fund 1,901.426300 54,034 56,977 (2,943)
Wasatch Advisors Growth Fund 1,036.485300 19,800 23,293 (3,493)
Lazard Small Capital Portfolio 1,819.560200 30,456 38,387 (7,931)
Brinson Global Equity Fund 1,585.030700 19,209 19,647 (438)
MCM Stable Value Advisory Fund 390,928.636400 3,919,929 3,909,966 9,963
Cash Investments 4,000,053.780000 4,000,054 4,000,054 -
Carriage Services, Inc. Common Stock 125.584700 3,184 2,832 352
Investments held in custody of Great-West
Life & Annuity Insurance Company:
Aggressive Growth Funds:
American Century Ultra Growth Fund 12,273.731127 361,445 269,476 91,969
AIM Constellation Fund 10,785.468918 317,283 257,537 59,746
Growth Funds:
Fidelity Advisor Growth Opportunity Fund 8,776.872770 182,359 139,008 43,351
Maxim Stock Index Fund 2,935.793945 194,708 144,988 49,720
AIM Weingarten Fund 8,848.586721 216,121 159,101 57,020
Growth and Income Funds:
AIM Charter Fund 7,377.781063 180,621 139,490 41,131
Putnam Fund For Growth and Income 9,471.903683 168,148 137,642 30,506
International Funds:
Putnam Global Growth Fund 8,230.400870 143,937 119,881 24,056
Money Market Fund:
Maxim Money Market Fund 7,487.567461 138,366 134,025 4,341
Profile Funds:
Great-West Profile Series I 18,123.843039 361,995 294,497 67,498
Great-West Profile Series II 30,245.597948 551,442 443,947 107,495
</TABLE>
-24-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
CARRIAGE SERVICES, INC.
401 (k) Plan
By: /s/ TIMOTHY R. MCBROOM Date: June 29, 1999
------------------ --------------
Timothy R. McBroom
Assistant Vice President and
Treasurer
