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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 1, 2000.
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.
Exhibit No. Description
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Exhibit 99 The Loewen Group Inc. Press Release dated May 1, 2000.
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 1, 2000.
THE LOEWEN GROUP INC.
By: /s/ Bradley D. Stam
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Name: Bradley D. Stam
Title: Senior Vice President,
Legal & Asset Management
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EXHIBIT INDEX
Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated May 1, 2000
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THE LOEWEN GROUP INC.
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(TSE: LWN) NEWS
Media Contact: James Hoggan & Associates Inc.
Karen Cook Boas
(604) 739-7500 or
Email [email protected]
Investor Contact: (800) 347-7010
FOR IMMEDIATE RELEASE
THE LOEWEN GROUP REPORTS FIRST QUARTER 2000
o Reorganization Progress Continues
o Operating Cashflow Increases while Cash Balances Increase 61%
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VANCOUVER, BC -- May 1, 2000 -- THE LOEWEN GROUP INC. (TSE: LWN), today
announced its unaudited results for the quarter ended March 31, 2000 and
commented on the progress of its reorganization since the Company was granted
court protection from creditors on June 1, 1999. The Company reported net
earnings of $22.8 million on gross revenue of $256.9 million for the quarter
ended March 31, 2000, compared with net earnings of $6.9 million on gross
revenue of $306.8 million for the quarter ended March 31, 1999.
John S. Lacey, Chairman of the Board, said the quarter's results demonstrate
that the Company's initiatives to increase operating efficiencies are beginning
to have a positive impact on net earnings and particularly cashflow. "Although
our operating performance, when compared to 1999, still reflects the effects of
the bankruptcy filing, we continue to initiate steps and strategies to improve
the long-term cashflow of our businesses while improving our service to clients
at competitive prices."
OPERATING RESULTS
Funeral home revenues for the first quarter were $161.1 million, a decrease of
7.6 percent from $174.3 million in the first quarter of 1999. On a same store
basis, the number of funerals performed was down 6.2 percent compared with the
first quarter of 1999, which reflects to a large extent the effects of the
bankruptcy filing in June 1999. The Company also experienced a lower average
revenue per funeral service during the quarter as more competitive pricing was
implemented during 1999 to restore market share and volumes over the long term.
Overall funeral home operating margins in Q1 2000 were 34.0 percent compared
with 38.7 percent in Q1 1999. The Company performed approximately 43,400 funeral
services during the first quarter of 2000 compared with 46,300 in the same
period a year earlier.
First quarter cemetery revenues were down 34.5 percent to $71.2 million,
compared with $108.8 million in the same quarter in 1999. This reflects the sale
of 124 cemeteries on March 31, 1999 and the Company's previously announced
changes to its commission structure and pre-need sales
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program. These changes contributed to the improved cemetery cash flow of $21.3
million for the quarter ended March 31, 2000 compared with cash flow of $10.0
million in the same period last year. Cemetery operating margin was $19.6
million for the quarter compared with $30.1 million for the same period last
year. The Company has implemented additional changes in its pre-need sales
program in April 2000 to further improve cashflow.
General and administrative expenses were reduced 32.5 percent or $8.5 million in
the first quarter of 2000 from the same period in 1999, as part of a continuing
program to operate more efficiently.
The Company incurred $6.9 million in reorganization costs during the quarter
arising from expenses related to the June 1, 1999 filings under Chapter 11 of
the U.S. Bankruptcy Code and under the Canadian Companies' Creditors Arrangement
Act.
REORGANIZATION PROGRESS
Mr. Lacey commented: "We are continuing to make progress on our plans to emerge
from bankruptcy. This process requires many steps, requiring cooperation from
all parties involved, including employees and the Official Unsecured Creditors'
Committee. Following approval of the Company's business plan in February this
year by our Board of Directors and the court-appointed Official Unsecured
Creditors' Committee, we have begun implementation of its major initiatives."
Mr. Lacey also said Loewen has made substantial progress on identification of
creditor claims, which must be successfully concluded before it can emerge from
bankruptcy. In response to the establishment of the December 15, 1999 bar date,
the deadline by which pre-petition claims had to be filed to be included within
the Company's reorganization plan, the Company received approximately 9,000
claims, each of which has now been evaluated and categorized. Progress toward
development of the reorganization plan continues.
"We are pleased with the continued good performance of all our employees in not
only our ongoing business activities but those steps and processes necessary to
ensure this Company emerges from bankruptcy."
The Company continues to support the investigation and analysis regarding the
uncertainty of the secured status of the Series 3, 4, 6, 7 and Pass-through
Asset Trust Securities. As announced earlier, Loewen has confirmed that it
satisfied its obligations under the financing agreements.
CASH BALANCES AND DIP FACILITY
The Company has continued to build its cash balances, to $89 million at March
31, 2000 from $55 million at December 31, 1999. In July 1999, the Loewen Group
obtained $200 million in debtor-in-possession ("DIP") financing to be used as
working capital during the reorganization process. The Company has not found it
necessary to borrow under the DIP facility during the first quarter and is
currently using it only for letters of credit aggregating $20 million.
Reflecting the improvements to its cash position, the Company and its DIP
lenders are currently syndicating a reduced and amended facility with closing
expected during the second quarter.
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ASSET DIVESTITURES
The Company is currently divesting 371 non-core funeral and cemetery operations
through a process approved by the Bankruptcy Court on January 21, 2000. Of the
250 letters of intent received for various groups of properties, the Company now
has formal bids for the majority of the properties offered for sale. Potential
buyers have commenced due diligence and initial negotiations.
BASIS OF PRESENTATION
The Company's attached unaudited interim consolidated statement of operations
and deficit, balance sheet and cash flow statement have been prepared on a
"going concern" basis in accordance with Canadian generally accepted accounting
principles. The going concern basis of presentation assumes that the Company
will continue in operation for the foreseeable future and will be able to
realize its assets and discharge its liabilities and commitments in the normal
course of business. As a result of the bankruptcy proceedings and circumstances
relating to this event, including the Company's debt structure, recent losses
and level of cash flow, such realization of assets and discharge of liabilities
are subject to significant uncertainty.
The interim consolidated financial statements do not reflect adjustments that
would be necessary if the going concern basis was not appropriate. If the going
concern basis was not appropriate for these interim consolidated financial
statements, then significant adjustments would be necessary in the carrying
value of assets and liabilities, the reported revenues and expenses, and the
balance sheet classifications used. Additionally, the amounts reported could
materially change as part of a plan of reorganization, since the reported
amounts in these consolidated financial statements do not give effect to all
adjustments to the carrying value of the underlying assets or amounts of
liabilities that may ultimately result. The appropriateness of the going concern
basis is dependent upon, among other things, confirmation of a plan of
reorganization, future profitable operations, the ability to renegotiate and
comply with the terms of the DIP financing and the ability to generate
sufficient cash from operations and financing arrangements to meet obligations.
Based in Vancouver, The Loewen Group Inc. currently owns or operates more than
1,100 funeral homes and more than 400 cemeteries across the United States,
Canada, and the United Kingdom. The Company employs approximately 13,000 people
and derives approximately 90 percent of its revenue from its U.S. operations.
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Safe Harbor: Certain 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.
