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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 1996
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 0-18429 98-0121376
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
N/A
(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 7
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ITEM 5. OTHER EVENTS.
Pursuant to Form 8-K, General Instructions F, registrant hereby incorporates by
reference the press release attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibit No. Description
Exhibit 99 The Loewen Group Inc. Press Release dated November 7,
1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 7, 1996
THE LOEWEN GROUP INC.
By: /s/ Peter S. Hyndman
-----------------------------
Name: Peter S. Hyndman
Title: Corporate Secretary
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EXHIBIT INDEX
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99 The Loewen Group Inc. 4
Press Release dated November 7, 1996
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The Loewen Group Inc.
NEWS
Stock Symbols: Investor contacts:
NYSE: LWN Paul Wagler, Senior Vice President, Finance
TSE: LWN Dwight Hawes, Vice President, Finance
ME: LWN The Loewen Group Inc.
Tel: (800) 347-7010
(All amounts listed in U.S. dollars)
Media Contacts:
Dave Laundy, Vice President,
Corp. Communications
Tel: (604) 293-7857
Tom Franco
Broadgate Consultants Inc.
Tel: (212) 229-2222
FOR IMMEDIATE RELEASE
THE LOEWEN GROUP ANNOUNCES RECORD THIRD QUARTER
VANCOUVER, B.C., November 7, 1996 - Record revenues during the third quarter of
1996 and a 26% increase in fully diluted earnings per share were reported today
by the Loewen Group Inc. The Company also announced it had completed a record
level of acquisitions in the nine months ended September 30, 1996.
RECORD REVENUE AND EARNINGS
During the third quarter of 1996, revenues increased 51% to $231.5 million, up
from $153.6 million for the same quarter of the previous year. Earnings from
operations also increased to $47.3 million, up 67% from the same period in 1995.
Before giving effect to 1996 costs associated with the hostile takeover proposal
from Service Corporation International and 1995 non-recurring costs for legal
proceedings, fully diluted earnings per share increased 26% to $0.29 for the
three months ended September 30, 1996 from $0.23 for the same period in 1995.
Fully diluted earnings per share after such non-recurring costs increased 25% to
$0.25 for the third quarter from $0.20 for the same period in 1995.
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For the first nine months of 1996, in comparison to the same period in 1995,
revenue increased 54% to $647.7 million from $421.1 million. Earnings from
operations rose 51% to $141.8 million from $93.9 million. Fully diluted earnings
per share increased to $0.84 per share from $0.82 per share as the increase in
net earnings was offset by the increased number of Common shares outstanding and
the Series C preferred share dividend.
Strong growth in the Company's cemetery division continued during the quarter,
with 1996 cemetery revenues increasing 100% to $77.7 million in the third
quarter of 1996 from $38.9 million the previous year. Gross margins for cemetery
operations improved to 34.3% from 28.4% for the previous year's quarter.
Funeral home revenues increased 23% in the third quarter to $130.8 million, up
from $106.3 million in 1995. Funeral home gross margins were 38.5% for the three
months ended September 30, 1996, as compared to 40.0% for the same quarter of
1995.
Insurance revenues increased in the third quarter of 1996 to $23.0 million from
$8.4 million in 1995, primarily due to the March 1996 acquisition of the
insurance assets of S.I. Acquisition Associates L.P.
1996 ACQUISITION PROGRAM
To date in 1996, the Company has acquired 132 funeral homes, 110 cemeteries and
two insurance companies with an aggregate purchase price of approximately $520
million. In addition, the Company has signed agreements for the acquisition of
89 additional funeral homes and 91 additional cemeteries for an estimated
aggregate purchase price of $277 million.
The Company's acquisitions in 1996 have include S.I. Acquisition Associates
L.P., with its 15 funeral homes, two cemeteries and two insurance companies; CMS
West with its seven funeral homes and 28 cemeteries and, through an affiliate,
the Eldridge group with its eight cemeteries. These operations have
significantly strengthened the Company's presence in Louisiana, Pennsylvania and
Michigan respectively.
To date in 1996, The Loewen Group has been involved in acquisitions or
structured transactions totalling $1.3 billion. Loewen has signed or closed $797
million in acquisitions. In addition, with Blackstone Capital Partners II
Merchant Banking Fund L.P., Loewen has invested in two highly innovative
structured transactions aggregating $535 million - the $295 million August 1996
acquisition of Prime Succession, Inc., and the $240 million signed acquisition
of the Rose Hills Memorial Park and mortuary, which is expected to close in late
November 1996. Loewen invested $78 million in cash in the Prime transaction and
expects to invest $72 million in cash and $23 million in property in the Rose
Hills transaction.
"We remain committed to maximizing shareholder value through effective cost
management and an aggressive program of acquisitions, which this year has given
us the largest acquisition volume of any funeral and cemetery company in North
America," said Chairman and CEO Raymond L. Loewen.
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"The key to our success and credibility is the quality of our service to
families on the local level, our succession planning commitments to new
affiliates and a sharp focus on strong financial management, " said Mr. Loewen.
STRATEGIC INVESTMENTS
On September 20, 1996, The Loewen Group announced the formation of its second
corporate venture with Blackstone Capital Partners, to acquire the cemetery and
mortuary operations and assets of The Rose Hills Memorial Park Association and
Roses Inc., of Los Angeles for $240 million.
Among Rose Hills' operations and assets are Rose Hills Memorial Park, the
largest cemetery in North America, and its mortuary, which serves more families
annually than any other single location mortuary in the United States. As part
of the transaction, 14 funeral homes and two combination funeral home/cemetery
operations currently owned by Loewen in Los Angeles and Orange Counties will be
integrated into the new company.
"This transaction, which we expect will be additive to earnings per share in
1997, is part of Loewen's long-term growth plan to acquire strategic operators
consisting of larger urban properties as well as small, family-owned funeral
homes and cemeteries, a strategy which is making Loewen the trendsetter in our
industry and which we believe will add long-term value for our shareholders,"
said Mr. Loewen.
The previously announced investment in Prime Succession Inc., North America's
fourth largest operator by revenue, was completed on August 26, 1996. Together,
with Loewen's proposed investment in Rose Hills, these strategic investments
provide an opportunity to significantly expand Loewen's presence and involvement
in premier funeral and cemetery properties in the United States.
SCI HOSTILE TAKEOVER OFFER
On September 17, 1996, Service Corporation International announced its intention
to launch a hostile takeover proposal of The Loewen Group Inc., initially
offering a stock for stock exchange valuing Loewen Common shares at $43. On
October 2, 1996, SCI announced it intended to make a share exchange tender offer
valuing Loewen's Common shares at $45 and its Series C Preferred shares at
$29.50.
Both proposals were unanimously rejected by Loewen's Board of Directors, which
stated that the best way to maximize value for shareholders is through continued
implementation of the Company's long-term business plan as an independent
company.
In a letter to shareholders dated October 10, Mr. Loewen said the Company would
continue to execute its business plan. "We have the right strategy, and its
working. We have the right team and a reputation as a provider of superior
services. We're in the right industry at the right time. And we have built a
strong foundation for significant growth in revenues and profitability in the
future," he wrote.
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With corporate offices in Burnaby, British Columbia, Cincinnati and
Philadelphia, The Loewen Group is the second largest funeral home and cemetery
operator in North America. The Company employs approximately 13,000 people and
owns and operates 947 funeral homes and 289 cemeteries across the United States
and Canada. Over 90 per cent of the Company's revenue is derived from the United
States.
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