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UNITED STATES 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): December 17, 1997
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 or former address, if changed since last report)
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Item 5. Other Events
On December 17, 1997, the Company issued the following press release
for the quarter and year ended October 31, 1997.
CONTACT: Ronald H. Patron
Stewart Enterprises, Inc.
110 Veterans Blvd.
Metairie, LA 70005
504/837-5880
FOR IMMEDIATE RELEASE
STEWART ENTERPRISES REPORTS FOURTH QUARTER AND YEAR-END RESULTS
- - FISCAL YEAR 1997 EARNINGS INCREASE 39%, EARNINGS PER SHARE
INCREASE 30%
Metairie, Louisiana, December 17, 1997. . . Stewart
Enterprises, Inc. (Nasdaq NMS:STEI) today announced fiscal year
1997 results, highlighted by a 39% increase in earnings, to
$69.7 million, and a 30% increase in earnings per share to
$1.57, before the cumulative effect of changes in accounting
principles reported earlier this year, compared to fiscal year
1996 net earnings and earnings per share of $50.0 million and
$1.21, respectively, presented on a pro forma basis to reflect
the changes in accounting methods. The cumulative effect of the
changes in accounting principles resulted in a $2.3 million, or
$.05 per share, charge to earnings for the fiscal year ended
October 31, 1997. Revenues increased 23%, to $532.6 million
from $432.3 million on a pro forma basis for fiscal year 1996.
Excluding the effect of the accounting changes, net earnings
for the year increased 29% to $66.4 million, and earnings per
share increased 21%, to $1.50, from the $51.3 million and
$1.24, respectively, previously reported for fiscal year 1996.
Fiscal year 1997 per-share performance reflects a 7% increase
in the weighted average number of shares outstanding, from 41.4
million to 44.4 million, due principally to the Company's
equity offering completed in June 1997.
For the current quarter, net earnings increased 59% to $18.4
million, and earnings per share increased 36% to $.38, from
$11.6 million and $.28, respectively, presented on a pro forma
basis for the corresponding period in fiscal year 1996. For
the same period, revenues increased 28%, to $142.2 million from
$111.1 million on a pro forma basis for the comparable period
last fiscal year.
Excluding the effect of the accounting changes, net earnings
for the current quarter increased 38% to $17.3 million, and
earnings per share increased 20%, to $.36, from the $12.5
million and $.30, respectively, previously reported for the
fourth quarter of fiscal year 1996.
Fourth quarter per-share performance reflects a 17% increase in
the weighted average number of shares outstanding, from 41.7
million to 48.6 million, due principally to the Company's
recent equity offering.
FISCAL YEAR 1997 MARKED BY RECORD-BREAKING FINANCIAL
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PERFORMANCE AND OTHER MILESTONES
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Joseph P. Henican, III, Chief Executive Officer, commented,
"Fiscal year 1997 has been a very exciting year for Stewart
Enterprises. We posted a 30% increase in EPS growth over
fiscal year 1996 levels. Our revenues exceeded half a billion
dollars, nearly triple the amount recognized just five years
ago. As of October 31, 1997, our stock price appreciated more
than 21% since the end of fiscal year 1996, and our total
market capitalization exceeded $2.5 billion."
Mr. Henican continued, "We completed our first public debt
offering, issuing $100 million of 7-year notes at attractive
rates with investment grade ratings, we increased our revolving
credit facility to $600 million, and we completed our fifth,
and largest, equity offering, generating nearly $211 million in
net proceeds. In each of these transactions, we were favorably
received by the financial community. Later in the year, we
were selected for inclusion in the S&P MidCap 400 and Nasdaq-
100 Indices, two key barometers of stock market activity."
"The common thread that ties all of these events together is
the dedication and commitment of every employee of Stewart
Enterprises. It is only through the coordinated efforts of
these 9,000 individuals that results like these have been
possible, and it is this team that will lead Stewart
Enterprises into the next millennium."
MARGINS EXPAND NEARLY 300 BASIS POINTS; 114 NEW BUSINESSES
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ADDED FOR $185 MILLION
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William E. Rowe, President and Chief Operating Officer, stated,
"Once again, we are pleased to report another fine financial
performance, highlighted by significant gross and operating
margin expansion. Including the effects of our recent
accounting changes, our gross margin for the current fiscal
year expanded 270 basis points, to 29.5%, and our operating
margin increased 310 basis points to 26.6%, from 26.8% and
23.5%, respectively, on a pro forma basis for fiscal year 1996.
This performance reflects our continued focus on improving the
performance of our core businesses and the maturation of recent
acquisitions, including our strategy of controlling costs by
negotiating favorable contracts with major suppliers."
Mr. Rowe commented further, "During fiscal year 1997, we
acquired 114 businesses for an aggregate purchase price of
approximately $185 million, and we entered the states of New
Mexico, Oklahoma and Washington in the United States. During
the fiscal year, we also entered the continent of Europe, with
the acquisition of 18 funeral homes in Spain and Portugal.
Domestically, we have added another 38 properties to our West
Coast operations, including the acquisition in March of this
year of the Sentinel Cremation Societies, a premier alternative
services firm. We expanded our presence in Australia and New
Zealand with 19 new businesses there, and we enhanced our
existing clusters in Florida with 14 new businesses there.
Earlier this year, we announced the expansion of our Corporate
Development team with the addition of seasoned industry
professionals to assist in our domestic expansion and to create
a corporate development team in Europe."
"During fiscal year 1997, we were especially pleased to have
been selected by the Archdiocese of Los Angeles to build
funeral homes on six of their cemeteries. This alliance will
enable us to assist the Archdiocese in serving the Catholic
community, and it provides us with an innovative internal
growth strategy."
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 406 funeral homes
and 130 cemeteries in North America, Europe and the Pacific
Rim.
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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 July 31, 1997.
The Company assumes no obligation to update information
contained herein.
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STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
Three Months Ended October 31,
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1997 1996 1996
--------- -------- ----------
Revenues: (Pro Forma)(1)(As Reported)
Funeral $ 80,110 $ 58,897 $ 60,487
Cemetery 62,096 52,237 52,786
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Total revenues 142,206 111,134 113,273
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Costs and expenses:
Funeral 56,080 41,612 41,612
Cemetery 44,617 41,145 41,588
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Total costs and expenses 100,697 82,757 83,200
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Gross profit 41,509 28,377 30,073
Corporate general and administrative
expenses 4,943 4,947 4,947
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Operating earnings 36,566 23,430 25,126
Interest expense (8,866) (7,471) (7,471)
Investment and other income 416 2,300 2,300
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Earnings before income taxes 28,116 18,259 19,955
Income taxes 9,700 6,662 7,483
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Net earnings $ 18,416 $ 11,597 $ 12,472
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Earnings per common share $ 0.38 $ 0.28 $ 0.30
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Weighted average common
shares outstanding (in thousands) 48,644 41,694 41,694
========= ========= =========
Dividends per common share $ 0.02 $ 0.02
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(1) Reflects changes in the Company's accounting methods,
effective November 1, 1996
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
Year Ended October 31,
-----------------------------------
1997 1996 1996
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Revenues: (Pro Forma)(1)(As Reported)
Funeral $291,649 $219,134 $225,461
Cemetery 240,937 213,120 207,926
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Total revenues 532,586 432,254 433,387
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Costs and expenses:
Funeral 202,414 153,222 153,222
Cemetery 173,000 163,351 162,047
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Total costs and expenses 375,414 316,573 315,269
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Gross profit 157,172 115,681 118,118
Corporate general and administrative
expenses 15,402 14,096 14,096
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Operating earnings 141,770 101,585 104,022
Interest expense (38,031) (26,051) (26,051)
Investment and other income 2,738 4,104 4,104
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Earnings before income taxes and
cumulative effect of change in
accounting principles 106,477 79,638 82,075
Income taxes 36,735 29,679 30,778
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Earnings before cumulative effect
of change in accounting principals 69,742 49,959 51,297
Cumulative effect of change in
accounting principles, net of a
$2,230 income tax benefit (2,324) - -
---------- ----------- ------------
Net earnings $ 67,418 $ 49,959 $ 51,297
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Earnings per common share:
Earnings before cumulative effect
of change in accounting principles $ 1.57 $ 1.21 $ 1.24
Cumulative effect of change
in accounting priciples (0.05) - -
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Net earnings $ 1.52 $ 1.21 $ 1.24
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Weighted average common shares
outstanding (in thousands) 44,389 41,410 41,410
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Dividends per common share $ 0.08 $ 0.066
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(1) Reflects changes in the Company's accounting methods,
effective November 1, 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.
December 18, 1997 /s/ KENNETH C. BUDDE
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Kenneth C. Budde
Senior Vice President-Finance
Secretary and Treasurer
(Principal Accounting Officer)
