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): September 9, 1996
STEWART ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 0-19508 72-0693290
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
(Address of principal executive offices) (Zip Code)
(504) 837-5880
(Registrant's telephone number, including area code)
Not Applicable
(Former name of former address, if changed since last report)
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Item 5. Other Events
On September 9, 1996 the Company issued the attached earnings release
for the quarter ended July 31, 1996.
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CONTACT: Ronald H. Patron
Stewart Enterprises, Inc.
110 Veterans Blvd.
Metairie, LA 70005
504/837-5880
FOR IMMEDIATE RELEASE
STEWART ENTERPRISES REPORTS THIRD QUARTER RESULTS -
REVENUES RISE 19%, EARNINGS INCREASE 36%
Metairie, Louisiana, September 9, 1996. . . Stewart Enterprises, Inc. (Nasdaq
NMS:STEI) today announced a 19.0% increase in revenues and a 35.8% increase
in net earnings for the third quarter ended July 31, 1996, before giving
effect to the non-cash, non-recurring charge taken in the third quarter of
1995 related to the vesting of its performance-based stock options.
Revenues for the third quarter increased 19.0% to $108.9 million from $91.5
million reported a year ago. Net earnings increased 35.8% to $12.9 million,
and earnings per share increased 29.2% to $.31 per share, from $9.5 million
and $.24 per share, respectively, before giving effect to the $17.3 million
($10.9 million, or $.28 per share, after tax) non-recurring, non-cash charge
required by generally accepted accounting principles in connection with the
vesting of the Company's performance-based stock options, recorded during the
third quarter of fiscal 1995. Fiscal 1996 per share performance reflects a
6.9% increase in the weighted average number of common shares outstanding,
from 38.9 million to 41.6 million. Share and per share amounts for 1995 have
been restated to reflect the Company's 3-for-2 stock split effective June 21,
1996.
For the nine months ended July 31, 1996, revenues grew 17.1% to $320.1 million
from $273.4 million reported for the comparable period last year. Net earnings
increased 42.1% to $38.8 million, and earnings per share increased 20.5% to
$.94 per share, from $27.3 million and $.78 per share, respectively, before
giving effect to the $17.3 million ($10.9 million, or $.31 per share, after
tax) stock option charge recorded in the third quarter of 1995. For the
current year to date period, the weighted average number of common shares
outstanding increased 18.0%, from 35.0 million to 41.3 million, due
principally to the Company's public offering of 6,037,500 Class A common
shares in May 1995. Share and per share amounts for 1995 have been restated
to reflect the Company's 3-for-2 stock split effective June 21, 1996.
MARGINS CONTINUE TO EXPAND; ACQUISITION PROGRAM STRONG
William E. Rowe, President and COO, stated, "Once again, we are pleased to
report another strong financial performance. For the quarter, our gross margin
expanded to 27.3% from 24.8%, and our operating margin increased to 24.6%
from 21.7%, excluding the effect of the stock option charge recorded in
fiscal 1995. For the nine-month period, our gross margin increased to 27.5%
from 24.4%, while our operating margin expanded to 24.6% from 21.6%,
excluding the stock option charge. These results reflect continuing
improvements in our core business and contributions from recent acquisitions."
Mr. Rowe went on to say, "Thus far in fiscal 1996, we have acquired or
committed to acquire 133 funeral homes and 16 cemeteries for an aggregate
purchase price of approximately $183 million. Included in our commitments
is the acquisition of 82 businesses in Montreal and Quebec, representing the
largest acquisition ever to be completed by the Company."
EXPANSION INTO CANADA; PERFORMANCE ON TRACK FOR THE YEAR
Joseph P. Henican, III, CEO, commented, "We are extremely pleased with the
opportunity to establish our presence in Canada through an affiliation with
the Urgel Bourgie firm. Upon completion of the acquisition, we look forward
to carrying on the fine business and outstanding reputation of Urgel Bourgie
by serving the families in the Montreal and Quebec City regions."
Mr. Henican continued, "We are very excited about our financial performance
thus far this fiscal year and are on track to achieve our goal of 20% growth
in earnings per share over 1995 levels, excluding the stock option charge.
This excellent performance is a direct result of the dedication and
commitment of the entire Stewart team to enhance shareholder value."
Founded in 1910, Stewart Enterprises is the third largest provider of
products and services in the death care industry in North America, currently
owning and operating 209 funeral homes and 114 cemeteries in 21 states,
Puerto Rico, Mexico, Australia and New Zealand.
Statements made herein that are not historical facts are forward-looking
statements. The Company's actual results could differ materially due to
several important factors including the following: the Company's ability to
sustain recent levels of acquisition activity and enter new markets; the
economy, death rate and competition in the Company's markets; financial
market conditions, including stock and bond prices and interest rates;
the Company's ability to achieve economies of scale and manage growth; and
the performance of acquired businesses. Such factors, and others, are more
fully described in Item 5 of the Company's Form 10-Q for the quarter ended
April 30, 1996. The Company assumes no obligation to update information
contained herein.
#####
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STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended July 31,
____________________________
1996 1995
____________ ____________
Revenues:
Funeral $ 56,971 $ 45,979
Cemetery 50,813 44,690
Construction and sales contracts 1,150 855
____________ ____________
Total revenues 108,934 91,524
____________ ____________
Costs and expenses:
Funeral 37,908 32,688
Cemetery 40,294 35,281
Construction and sales contracts 1,009 851
____________ ____________
Total costs and expenses 79,211 68,820
____________ ____________
Gross profit 29,723 22,704
Corporate general and administrative 2,884 2,839
____________ ____________
Operating earnings before
performance-based
stock options 26,839 19,865
Performance-based stock options - 17,252
____________ ____________
Operating earnings 26,839 2,613
Interest expense (6,558) (5,608)
Investment and other income 397 802
____________ ____________
Earnings (loss) before income tax 20,678 (2,193)
Income taxes 7,754 (810)
____________ ____________
Net earnings (loss) $ 12,924 $ (1,383)
============ ============
Earnings (loss) per common share$ 0.31 $ (0.04)<F1>
============ ============
Weighted average common shares
outstanding (in thousands) 41,551 38,879<F1>
============ ============
Dividends per common share $ 0.02 $ 0.007<F1>
============ ============
<F1> Restated to reflect the Company's three-for-two stock split
effective June 21, 1996.
<PAGE>
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended July 31,
___________________________
1996 1995
_____________ ____________
Revenues:
Funeral $ 164,974 $ 137,352
Cemetery 150,802 132,591
Construction and sales contracts 4,338 3,448
____________ ____________
Total revenues 320,114 273,391
____________ ____________
Costs and expenses:
Funeral 111,610 97,885
Cemetery 116,596 105,659
Construction and sales contracts 3,863 3,018
____________ ____________
Total costs and expenses 232,069 206,562
____________ ____________
Gross profit 88,045 66,829
Corporate general and administrative 9,149 7,796
____________ ____________
Operating earnings before
performance-based
stock options 78,896 59,033
Performance-based stock options - 17,252
____________ ____________
Operating earnings 78,896 41,781
Interest expense (18,580) (17,249)
Investment and other income 1,804 1,505
____________ ____________
Earnings before income taxes 62,120 26,037
Income taxes 23,295 9,635
____________ ____________
Net earnings $ 38,825 $ 16,402
============ ============
Earnings per common share $ 0.94 $ 0.47<F1>
============ ============
Weighted average common shares
outstanding (in thousands) 41,315 34,995<F1>
============ ============
Dividends per common share $ 0.046 $ 0.02<F1>
============ ============
<F1> Restated to reflect the Company's three-for-two stock split
effective June 21, 1996.
SIGNATURE
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 thereunto duly authorized.
STEWART ENTERPRISES, INC.
September 9, 1996 /s/ KENNETH C. BUDDE
Kenneth C. Budde
Senior Vice President Finance
Secretary and Treasurer
(Principal Accounting Officer)
