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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) March 2, 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 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 March 2, 1998
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: March 2, 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
Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated March 2, 1998
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THE LOEWEN GROUP INC.
(NYSE, TSE, ME: LWN)
NEWS
Investor contacts:
Dwight Hawes, Vice President, Finance Media Contact:
Chris Hunter, Director, Investor Relations Dave Laundy, Vice President,
The Loewen Group Inc. Corp. Communications
Tel: (800) 347-7010 Tel: (604) 293-7857
FOR IMMEDIATE RELEASE
LOEWEN GROUP FOURTH QUARTER EARNINGS
IMPROVE SUBSTANTIALLY OVER THIRD QUARTER
INITIAL BENEFITS FROM RESTRUCTURING AND STRATEGIC
INITIATIVES REALIZED
ANNUAL REVENUES REACH $1.1 BILLION, UP 25% OVER 1996
VANCOUVER, BC, March 2, 1998 -- The Loewen Group Inc. today reported
substantially improved earnings for the fourth quarter as compared with the
third quarter of 1997. Fully diluted earnings were $0.28 cents per share
compared with $0.15 per share in the third quarter of 1997, up 87 per cent,
after excluding earnings of $0.14 per share resulting from the sale of the
Company's shareholdings in Arbor Memorial Services Inc. and certain
restructuring, strategic initiatives and other charges.
Including the above earnings of $0.14 per share, the Company reported fourth
quarter 1997 net earnings of $33.6 million or $0.42 per share compared with net
earnings of $10.3 million or $0.13 per share for the same period in 1996.
"We are encouraged by the improvement in operating performance in the fourth
quarter," said Chairman and Chief Executive Officer Ray Loewen. "Our performance
to date in 1998 is showing further evidence that our recovery plan is on track
toward the goal of disciplined, predictable and sustained earnings growth."
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Chief Financial Officer Paul Wagler said "The fourth quarter earnings we
delivered are in line with expectations and reflect the initial benefits of the
restructuring and strategic initiatives implemented in the fall of 1997. These
initiatives should provide annual pre-tax savings of $25 to $30 million.
Furthermore the intensive reviews conducted with the Company's operational
management early in the first quarter will help us to strengthen our Company and
should result in additional earnings improvement."
Total revenues for 1997 were $1.1 billion, up 25 per cent over 1996. The Company
reported 1997 net earnings of $42.7 million or $0.49 per share, compared with
$64.1 million or $0.97 per share in 1996. Excluding certain gains and charges,
net earnings were $84.8 million or $1.12 per share in 1997, compared with $74.9
million or $1.16 per share in 1996. Excluded gains and charges in 1997, include
the gain on the sale of the Company's shareholdings in Arbor Memorial Services
Inc. and the restructuring, strategic initiatives and other charges recorded in
both the third and fourth quarters of 1997 and in 1996 include gains relating to
certain non-recurring revisions to actuarial assumptions in the insurance
operations and conversions of trust investments to insurance investments as well
as the costs associated with the Company's defense against a hostile takeover
proposal.
The following discussion of operating results excludes the gains and charges
mentioned above.
Total revenues for the fourth quarter of 1997 were $303.7 million, up 17 per
cent from $257.6 million in the same period of 1996. For the full year 1997,
total revenues increased to $1,131.3 million compared with $903.9 million in
1996.
Funeral home revenues for the fourth quarter of 1997 were $159.9 million, up 7
per cent from $149.0 million in the prior year period. As expected, funeral home
margins improved to 40.1 per cent from 34.2 per cent in the third quarter of
1997. In the fourth quarter of 1996, the funeral home margins were 40.3 per
cent.
Funeral home revenues for the year were $602.4 million, up 11 per cent from
$545.3 million in 1996, reflecting 153,000 funerals performed, compared with
142,000 a year earlier. Funeral home margins in 1997 were 38.8 per cent, down
from 40.1 per cent in 1996.
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Cemetery revenues for the fourth quarter 1997 rose 39 per cent to $121.8 million
from $87.7 million in 1996. The large number of cemetery acquisitions during
1997, combined with their integration and the build-up of the sales force,
depressed cemetery margins. Margins in the fourth quarter of 1997 were 28.5 per
cent compared with 33.3 per cent in 1996.
Overall, cemetery revenues for the year were $438.9 million, up 53 per cent from
$286.7 million a year ago. Cemetery margins in 1997 were 31.7 per cent, compared
with 32.1 per cent in 1996.
General and administrative expenses as a percentage of revenue were 8.8 per cent
for the fourth quarter of 1997 compared with 8.1 per cent for the same period in
1996. The increase in general and administrative expenses as a percentage of
revenue reflected a lag in revenue growth from the integration of recently
acquired cemeteries. For 1997, general and administrative expenses were 8.1 per
cent of revenue compared with 7.9 per cent in 1996.
During 1997 the Company continued its acquisition program on a focused and
disciplined basis, including its first European acquisition in the United
Kingdom. Acquisitions totaled $507.7 million, comprising 133 funeral homes and
172 cemeteries, and are expected to generate approximately $233 million in
annualized revenue. The Company currently has agreements in place and has closed
acquisitions to date in 1998 representing an aggregate purchase price of $269.9
million.
The Loewen Group Inc. is North America's second largest and fastest growing
funeral home and cemetery operator in terms of revenue and assets. The Company
employs approximately 18,000 employees and owns or operates over 1,000 funeral
homes and 500 cemeteries in the United States, Canada and the United Kingdom.
Over 90 per cent of the Company's revenue is derived from the United States.
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Note: Certain of the statements contained in this 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 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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