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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) May 7, 1998
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
British Columbia, Canada 0-18429 98-0121376
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
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N/A
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(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 6
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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.
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Exhibit No. Description
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Exhibit 99 The Loewen Group Inc. Press Release dated May 7, 1998
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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: May 7, 1998
THE LOEWEN GROUP INC.
By: /s/ PETER S. HYNDMAN
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Name: Peter S. Hyndman
Title: Corporate Secretary
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EXHIBIT INDEX
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Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated May 7, 1998
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THE LOEWEN GROUP INC.
(NYSE, TSE, ME: LWN)
NEWS
Investor contact:
Chris Hunter, Director, Investor Relations
The Loewen Group Inc.
Tel: (800) 347-7010
Media Contact:
Dave Laundy, Vice President,
Corporate Communications
Tel: (604) 293-7857
FOR IMMEDIATE RELEASE
LOEWEN REPORTS 28% NET
EARNINGS INCREASE
AND RECORD FIRST QUARTER REVENUE
- EARNINGS PER SHARE OF $0.38 EXCEEDS EXPECTATIONS OF $0.35
- CONTINUED IMPROVEMENTS IN OPERATIONS
FROM 1997 THIRD AND FOURTH QUARTERS
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VANCOUVER, BC, May 7, 1998 -- The Loewen Group Inc. (NYSE, TSE, ME: LWN) today
reported a 28% increase in net earnings to $30.4 million for the first quarter
of 1998 from $23.7 million in the first quarter of 1997. Fully diluted earnings
per share were $0.38 for the quarter compared with $0.36 per share a year
earlier. Revenues for the quarter increased 13% to a record $310.1 million from
$274.7 million in 1997.
The first quarter results reflect a substantial improvement in Loewen's
operations from the fourth and third quarters of 1997 when the company reported
net earnings per share of $0.28 and $0.15, respectively, after excluding the
sale of the company's interest in Arbor Memorial Services Inc. and certain
restructuring, strategic initiative, and other charges.
"Our results for the first quarter further demonstrate the company's recovery
plan is on track and returning us to disciplined, sustainable, and predictable
earnings growth," said Chairman and Chief Executive Officer Ray Loewen. "We have
successfully implemented a number of initiatives which have improved our revenue
and operating performance, while maintaining service quality."
General and administrative expenses as a percentage of revenue declined from
8.3% in the first quarter of 1997 to 8.0% in 1998, reflecting improved cost
management.
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Funeral home revenues were $171.9 million, up from $155.5 million in 1997 and
funeral home gross margin, at $72.9 million, increased from $63.5 million in the
same quarter last year. Funeral home
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gross margin as a percentage of revenue was 42.4%, up from 40.8% a year ago.
Cemetery revenues were $115.3 million, up from $97.4 million in the first
quarter of 1997 and cemetery gross margin was $38.3 million, compared with $33.3
million in the same period a year ago. Cemetery gross margin as a percentage of
revenue was 33.3%, a substantial improvement over the third and fourth quarters
of 1997 and compared with 34.2% in the first quarter of 1997.
The company's results included a $3.5 million contribution from its equity
interests in Rose Hills and Prime Succession, a 30% increase from $2.7 million
in the same period of 1997.
"Loewen exceeded the analysts' consensus estimate of $0.35 for the first
quarter," said Chief Financial Officer Paul Wagler. "We are pleased with both
the strength and quality of these earnings. We are realizing benefits from the
restructuring and strategic initiatives announced in the third quarter, 1997 and
are also benefiting from tighter control on expenses." Mr. Wagler further noted
that, "The company is starting to experience cost reductions from major supplier
re-negotiations, all designed to take greater advantage of the company's growing
purchasing power."
Since the beginning of the year, the company has closed transactions to acquire
47 funeral homes and 38 cemeteries for $142 million which are expected to
generate $54 million of annualized revenue. In addition, the company has in
place signed agreements to acquire 43 funeral homes and 39 cemeteries for an
estimated total purchase price of $154 million which are expected to generate
$61 million of annualized revenue.
Loewen's first international acquisition in the United Kingdom made a positive
contribution to earnings during the quarter. The company has two additional
signed agreements for acquisitions in Europe and is continuing to pursue further
opportunities internationally on a selective basis.
"The strength and character of Loewen's executives, managers and its 16,000
employees cannot be underestimated in the achievement of these results" said Mr.
Loewen. "Employees' determination and resolve to support the necessary
improvements paint a bright future, as we complete the recovery program and
continue Loewen's legacy of disciplined growth and service to families in this
very special industry."
The Loewen Group is North America's second largest and fastest growing funeral
home and cemetery operator in terms of revenues and assets. The company owns or
operates more than 1,100 funeral and 500 cemeteries in the United States,
Canada, and the United Kingdom. Over 90% of the company's revenue is derived
from the United States.
The Loewen Group's website is located at http://www.loewengroup.com
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Note: Certain of the statements contained in the press release, including, but
not limited to, information regarding the future economic performance and
financial condition of the company, the plans and objectives of the company's
management, and the company's assumptions regarding such
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performance and plans, are forward-looking in nature. Additional information
concerning important factors that could cause actual results to differ from the
forward-looking information contained in this release is included in the
company's publicly-filed quarterly and annual reports.
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