<PAGE>
Filed Pursuant to
Rule 424(b)(1)
Registration No. 333-27771 and 333-29625
PROSPECTUS
5,700,000 SHARES
LOGO
STEWART ENTERPRISES, INC.
CLASS A COMMON STOCK
Of the 5,700,000 shares of Class A Common Stock being offered hereby,
5,200,000 shares are being sold by the Company and 500,000 shares are being
sold by the Selling Shareholders. See "Selling Shareholders." The Company will
not receive any of the proceeds from the sale of the shares by the Selling
Shareholders. See "Use of Proceeds." The last reported sale price of the Class
A Common Stock (symbol "STEI") on the Nasdaq National Market on June 19, 1997
was $36.50 per share. See "Price Range of Common Stock and Dividend Policy."
The Company has two classes of common stock outstanding, Class A and Class
B, the rights of the holders of which are essentially identical, except that
holders of Class A Common Stock are entitled to one vote per share and holders
of Class B Common Stock are entitled to 10 votes per share. The Class B Common
Stock may be transferred only to certain transferees but is freely convertible
into an equal number of shares of Class A Common Stock. The Class A Common
Stock is freely transferable and non-convertible. Upon completion of the
offering, assuming that the over-allotment option described below is not
exercised, Frank B. Stewart, Jr., the Chairman of the Board of the Company and
one of the Selling Shareholders, will own beneficially shares of Class A and
Class B Common Stock having approximately 34.1% of the total voting power of
the Company.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS(2)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share........... $36.375 $1.545 $34.830 $34.830
- -------------------------------------------------------------------------------
Total(3)............ $207,337,500 $8,806,500 $181,116,000 $17,415,000
- -------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the offering, estimated at $269,441 payable
by the Company and $5,559 payable by the Selling Shareholders.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
855,000 additional shares of Class A Common Stock on the same terms and
conditions as set forth above solely to cover over-allotments, if any. If
such option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions, Proceeds to Company and Proceeds to Selling
Shareholders will be $238,438,125, $10,127,475, $210,895,650 and
$17,415,000, respectively. See "Underwriting."
----------------
The shares of Class A Common Stock are offered subject to prior sale when,
as and if delivered to and accepted by the Underwriters, and subject to
certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the Class A Common Stock will be made on or about
June 25, 1997 at the offices of Bear, Stearns & Co. Inc., 245 Park Avenue, New
York, New York 10167.
----------------
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
ABN AMRO CHICAGO CORPORATION
JOHNSON RICE & COMPANY L.L.C.
JUNE 19, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS
AND THE IMPOSITION OF PENALTY BIDS. SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300,
New York, New York 10048, and Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may also
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains an Internet Web site containing reports, proxy statements and other
information regarding registrants that file electronically with the Commission
(http://www.sec.gov). Such reports, proxy statements and other information may
also be inspected at the National Association of Securities Dealers, Inc. at
1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement"),
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Class A Common Stock offered by this Prospectus. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Class A Common Stock offered hereunder,
reference is made to the Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete and, where such contract or other document
is an exhibit to the Registration Statement, each such statement is qualified
in all respects by the provisions of such exhibit, to which reference is
hereby made for a full statement of the provisions thereof.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference into this Prospectus (the Company's Exchange Act
file number is 0-19508): (i) the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1996, filed January 24, 1997; (ii) the
description of the Company's Class A Common Stock set forth in its
Registration Statement under the Exchange Act dated September 5, 1991; (iii)
the Company's Quarterly Reports on Form 10-Q for the quarter ended January 31,
1997, filed March 17, 1997 and for the quarter ended April 30, 1997, filed
June 16, 1997; and (iv) the Company's Current Reports on Form 8-K, dated
December 5, 1996, filed December 6, 1996; dated March 10, 1997, filed March
11, 1997; dated May 23, 1997, filed May 23, 1997; and dated June 9, 1997,
filed June 9, 1997.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
to the extent that a statement contained herein or in any other document
subsequently filed which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus has been delivered, upon written or
oral request, a copy of any or all of the documents incorporated herein by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to Stewart Enterprises, Inc., Attention: Kenneth C. Budde, Senior
Vice President-Finance, 110 Veterans Memorial Boulevard, Metairie, Louisiana,
70005, telephone (504) 837-5880.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere or incorporated by
reference in this Prospectus. Unless otherwise indicated, the information in
this Prospectus assumes that the over-allotment option granted to the
Underwriters will not be exercised. Share and per-share amounts in this
Prospectus for fiscal years 1992 and 1993 have been adjusted to reflect the
Company's three-for-two stock split in the form of a 50% stock dividend
effected December 1, 1993. Additionally, share and per-share amounts for fiscal
years 1992 through 1996 have been adjusted to reflect the Company's three-for-
two stock split in the form of a 50% stock dividend effected June 21, 1996.
THE COMPANY
Stewart Enterprises, Inc. (the "Company") is the third largest provider of
products and services in the death care industry in North America. The Company
is a leader in the industry's movement toward consolidation, the integration of
funeral home and cemetery operations, the establishment of combined facilities,
and complete death care planning and delivery. Through its subsidiaries, the
Company operates 355 funeral homes and 125 cemeteries in 23 states, Puerto
Rico, Mexico, Australia, New Zealand, Canada and Spain. During fiscal year
1996, the Company acquired 134 funeral homes and 15 cemeteries for an aggregate
purchase price of $179.0 million. During fiscal year 1997, as of June 12, 1997,
the Company has acquired 56 funeral homes and five cemeteries for an aggregate
purchase price of $119.6 million and has entered into agreements in principle
or letters of intent to acquire 12 funeral homes and two cemeteries for an
aggregate purchase price of approximately $23.3 million.
The Company's strategy is to build market share in its existing markets
through extensive marketing, the sale of prearranged products and services and
the development of new funeral homes, and to expand in existing and new markets
through selective acquisitions. In each market in which it wishes to expand,
the Company's strategy is to acquire one or more premier facilities to serve as
a centerpiece for a group or cluster of other properties that may be acquired
subsequently in the same metropolitan area. The Company considers a funeral
home or cemetery to be a "premier" facility if, when measured by such factors
as tradition, heritage, reputation, physical size, volume of business,
available inventory, name recognition, aesthetics and potential for development
or expansion, it is one of the most highly regarded facilities in its market
area. Where feasible, the Company enters markets with, or subsequently
develops, combined operations in which a funeral home is located at and is
operated in conjunction with a Company-owned cemetery. The continued
acquisition and development of combined operations is a key component of the
Company's expansion plan.
The Company is a leader in the industry trend toward prearranged death care
planning. The Company believes that extensive marketing of death care
prearrangements assures a backlog of future business and builds current and
future market share. The Company markets a complete range of death care
products and services on a prearranged basis through a staff of approximately
3,000 commission sales counselors.
The Company believes that it is distinguishable from its competitors by the
quality of its funeral homes and cemeteries, the depth and experience of its
management team, its decentralized management structure and the quality and
value of its products and services.
The Company retains key managers of acquired companies and gives them
significant operational authority in order to assure the continuation of high
quality services and the maintenance of the acquired firm's reputation and
goodwill. The Company's 11 executive officers, five of whom joined the Company
through acquisitions, have an average of more than 24 years of experience in
the death care industry.
The Company is a Louisiana corporation, and the mailing address of its
executive offices is P.O. Box 19925, New Orleans, Louisiana 70179. Its
telephone number is (504) 837-5880.
3
<PAGE>
THE OFFERING
Securities Offered.......... 5,700,000 shares of Class A Common Stock, of
which 5,200,000 shares are being offered by the
Company and 500,000 shares are being offered by
the Selling Shareholders. See "Use of Proceeds"
and "Selling Shareholders."
Common Stock Outstanding
Prior to the Offering...... 40,594,182 shares of Class A Common Stock
1,777,510 shares of Class B Common Stock
Common Stock to be
Outstanding After the
Offering................... 45,794,182 shares of Class A Common Stock
1,777,510 shares of Class B Common Stock
Rights of Holders of Class
A and Class B Common
Stock...................... The rights of holders of Class A Common Stock and
Class B Common Stock are essentially identical,
except that holders of Class A Common Stock are
entitled to one vote per share and holders of
Class B Common Stock are entitled to 10 votes per
share. The Class B Common Stock may be transferred
only to certain transferees but is freely
convertible into an equal number of shares of
Class A Common Stock. The Class A Common Stock is
freely transferable and non-convertible.
Upon completion of the offering, Frank B. Stewart,
Jr., Chairman of the Board of the Company and one
of the Selling Shareholders, will own beneficially
approximately 8.5% of the Company's outstanding
Class A Common Stock and 100% of the Company's
outstanding Class B Common Stock. Because holders
of the Class B Common Stock are entitled to 10
votes per share, Mr. Stewart will own beneficially
shares of Class A and Class B Common Stock having
approximately 34.1% of the total voting power of
the Company.
Use of Proceeds............. The Company intends to use the net proceeds from
the sale of the Class A Common Stock offered
hereby to fund acquisitions and for general
corporate purposes. Pending use for such
purposes, the net proceeds will be used to repay
outstanding indebtedness. See "Use of Proceeds."
Nasdaq National Market
Symbol..................... STEI
4
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
------------------------------------------------------ ----------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Revenues:
Funeral................ $ 61,493 $ 75,348 $116,266 $ 188,991 $ 225,461 $ 108,003 $ 140,510
Cemetery(1)............ 83,338 107,315 138,092 179,831 207,926 103,177 107,235
-------- -------- -------- ---------- ---------- ---------- ----------
Total revenues......... 144,831 182,663 254,358 368,822 433,387 211,180 247,745
Gross profit:
Funeral................ 17,227 22,398 31,785 55,309 72,239 34,301 46,735
Cemetery(1)............ 14,446 19,032 25,812 34,434 45,879 24,021 26,811
-------- -------- -------- ---------- ---------- ---------- ----------
Total gross profit..... 31,673 41,430 57,597 89,743 118,118 58,322 73,546
Corporate general and
administrative......... (5,030) (7,223) (8,157) (11,113) (14,096) (6,265) (7,036)
-------- -------- -------- ---------- ---------- ---------- ----------
Operating earnings
before performance-
based stock options.... 26,643 34,207 49,440 78,630 104,022 52,057 66,510
Performance-based stock
options................ -- -- -- (17,252) -- -- --
-------- -------- -------- ---------- ---------- ---------- ----------
Operating earnings...... 26,643 34,207 49,440 61,378 104,022 52,057 66,510
Interest expense........ (5,414) (6,540) (8,877) (22,815) (26,051) (12,022) (19,033)
Investment and other
income................. 1,221 1,902 1,635 2,937 4,104 1,407 1,566
Distributions to prior
ITI shareholders(2).... (1,508) -- -- -- -- -- --
-------- -------- -------- ---------- ---------- ---------- ----------
Earnings from continuing
operations before
income taxes........... $ 20,942 $ 29,569 $ 42,198 $ 41,500(3) $ 82,075 $ 41,442 $ 49,043
======== ======== ======== ========== ========== ========== ==========
Earnings from continuing
operations............. $ 14,195 $ 18,839 $ 27,253 $ 26,145(3) $ 51,297 $ 25,901 $ 31,878
======== ======== ======== ========== ========== ========== ==========
Earnings per common
share from continuing
operations(4).......... $ .64 $ .71 $ .85 $ .72(3) $ 1.24 $ .63 $ .76
======== ======== ======== ========== ========== ========== ==========
Weighted average common
shares outstanding (in
thousands)(4).......... 22,239 26,535 31,910 36,386 41,410 41,196 42,005
======== ======== ======== ========== ========== ========== ==========
Dividends declared per
common share(4)........ $ .005 $ .018 $ .027 $ .033 $ .066 $ .027 $ .04
======== ======== ======== ========== ========== ========== ==========
<CAPTION>
OCTOBER 31, APRIL 30, 1997
------------------------------------------------------ ----------------------
AS
1992 1993 1994 1995 1996 ACTUAL ADJUSTED(5)
-------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets................. $299,996 $455,942 $759,390 $1,072,435 $1,360,913 $1,518,398 $1,518,398
Long-term debt, less
current maturities.... 82,740 122,517 260,913 317,451 515,901 638,963 458,116
Shareholders' equity... 143,134 232,006 325,671 483,978 547,447 573,904 754,751
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
------------------------------------------------------ ----------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Funeral homes in
operation at end of
period................ 48 76 105 161 298 193 342
At-need funerals
performed............. 12,365 14,588 23,539 37,263 38,351 18,122 28,473
Prearranged funerals
performed............. 5,449 6,320 7,571 9,225 15,422 7,691 8,600
-------- -------- -------- ---------- ---------- ---------- ----------
Total funerals
performed........... 17,814 20,908 31,110 46,488 53,773 25,813 37,073
Prearranged funerals
sold.................. 15,250 17,859 26,637 33,787 37,545 17,354 19,873
Backlog of prearranged
funerals at end of
period................ 112,801 130,610 183,886 222,532 294,829 237,818 336,211
Cemeteries in
operation at end of
period................ 35 57 90 105 120 113 123
Interments performed... 22,107 26,557 33,118 42,480 46,007 23,313 27,601
</TABLE>
5
<PAGE>
- --------
(1) Includes the Company's construction and sales operations, which previously
were classified as a separate industry segment.
(2) Investors Trust, Inc. ("ITI"), which generally administers the Company's
trust funds and escrow accounts, was acquired by the Company on November 1,
1992.
(3) Includes a non-recurring, non-cash charge of $17.3 million ($10.9 million,
or $.30 per share, after-tax) recorded during the third quarter of fiscal
year 1995 in connection with the vesting of the Company's performance-based
stock options. Excluding that charge, earnings from continuing operations
before income taxes, earnings from continuing operations, and earnings per
common share from continuing operations for fiscal year 1995 were $58.8
million, $37.0 million and $1.02, respectively.
(4) Fiscal years 1992 and 1993 reflect the Company's three-for-two split of its
Class A and Class B Common Stock effected December 1, 1993 by means of a
50% stock dividend. Additionally, fiscal years 1992 through 1996 reflect
the Company's three-for-two split effected June 21, 1996 by means of a 50%
stock dividend.
(5) Adjusted to reflect the sale of the Class A Common Stock offered hereby and
the application of the net proceeds from such sale. See "Use of Proceeds"
and "Capitalization."
6
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 5,200,000 shares of
Class A Common Stock offered by it hereby are estimated to be approximately
$180.8 million ($210.6 million if the Underwriters' over-allotment option is
exercised in full), based on an offering price of $36.375 per share and after
deducting underwriting discounts and commissions and estimated expenses of the
offering payable by the Company. The Company will not receive any proceeds
from the sale of Class A Common Stock by the Selling Shareholders.
The Company's growth strategy depends largely on its ability to consummate
acquisitions, and the availability of substantial financial resources is
important to its ability to compete effectively for acquisition opportunities.
The purpose of this offering is to further strengthen the Company's financial
position and to provide it with the financial flexibility necessary to take
advantage of acquisition opportunities as they arise. The Company initially
will use substantially all of the net proceeds to reduce the balances
outstanding on its revolving credit facilities, which amounts will then become
available to the Company to fund its continuing acquisition program and for
general corporate purposes. As of June 12, 1997, $427 million was outstanding
under the Company's $600 million revolving line of credit and $0.1 million was
outstanding under the Company's $10 million revolving line of credit. The $600
million revolving line of credit bears interest at the lead lending bank's
prime rate, or at certain optional rates at the Company's election (a weighted
average rate of approximately 6.22% at June 12, 1997), contains a facility fee
of 12.5 basis points, and matures on April 30, 2002. The $10 million revolving
line of credit bears interest at the lending bank's prime rate or at certain
optional rates at the Company's election (a weighted average rate of
approximately 6.0% at June 12, 1997) and matures on December 31, 1997.
Under the most restrictive of its credit agreements, the Company is required
to maintain a debt-to-equity ratio of not more than 1.25 to 1.0. After
application of the net proceeds of this offering, the Company's additional
borrowing capacity would be approximately $456 million under this ratio.
Of the funds drawn by the Company on its revolving lines of credit in the 12
months ended April 30, 1997, approximately 80% was used to fund acquisitions,
and the remainder was used for additions to property and equipment, including
new funeral home construction, and general corporate purposes.
As of June 12, 1997, pending acquisitions consisted of 12 funeral homes and
two cemeteries for an aggregate purchase price of approximately $23.3 million.
7
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Class A Common Stock is traded on the Nasdaq National Market
under the Symbol STEI. The following table sets forth, for the periods
indicated, the range of high and low bid prices, as reported by the Nasdaq
National Market. Prices for fiscal year 1995 and for the first three quarters
of fiscal year 1996 have been adjusted to reflect a three-for-two stock split
effected in the form of a 50% stock dividend on June 21, 1996.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal Year 1997
Third Quarter (through June 12, 1997)............... 37 1/2 32 1/2
Second Quarter...................................... 37 1/2 32 1/4
First Quarter....................................... 38 3/4 32 3/4
Fiscal Year 1996
Fourth Quarter...................................... 36 26 3/4
Third Quarter....................................... 32 11/64 24 1/2
Second Quarter...................................... 31 24 43/64
First Quarter....................................... 26 11/64 21 11/64
Fiscal Year 1995
Fourth Quarter...................................... 24 20 11/64
Third Quarter....................................... 22 43/64 18 1/2
Second Quarter...................................... 18 21/64 15 53/64
First Quarter....................................... 16 1/2 15 1/2
</TABLE>
The Company declared quarterly cash dividends of $.007 per share on its
Class A and Class B Common Stock during the first three quarters of fiscal
year 1995, $.013 per share during the fourth quarter of fiscal year 1995 and
the first two quarters of fiscal year 1996, and $.02 per share thereafter. The
Company intends to continue its current policy of declaring quarterly cash
dividends on the Class A and Class B Common Stock in the amount of $.02 per
share. The declaration and payment of dividends is at the discretion of the
Board of Directors and will depend on the Company's results of operations,
financial condition, cash requirements, future prospects and other factors
deemed relevant by the Board of Directors. The most restrictive of the
Company's credit agreements restricts the declaration and payment of cash
dividends on the capital stock of the Company within any period of four
consecutive quarters to 50% or less of the Company's consolidated net earnings
for those four quarters. Additionally, the credit agreement limits the
purchase, redemption, or retirement of any shares of the Company's capital
stock to 5% or less of its consolidated net worth on the payment date.
8
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of April
30, 1997, and such capitalization as adjusted to reflect the sale by the
Company of the 5,200,000 shares of Class A Common Stock offered hereby,
assuming no exercise of the Underwriters' over-allotment option (based upon an
offering price of $36.375 per share and after deducting underwriting discounts
and commissions and estimated expenses of the offering payable by the
Company).
<TABLE>
<CAPTION>
APRIL 30, 1997
--------------------------
ACTUAL AS ADJUSTED(1)
---------- --------------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of long-term debt................ $ 11,108 $ 11,108
========== ==========
Long-term debt, excluding current maturities(2)
Revolving lines of credit......................... $ 410,907 $ 230,060
Senior notes...................................... 117,857 117,857
6.70% Notes due 2003.............................. 100,000 100,000
Other, principally seller financing of acquired
operations or assumption upon acquisition........ 10,199 10,199
---------- ----------
Total long-term debt............................ 638,963 458,116
---------- ----------
Preferred stock, $1.00 par value, 5,000,000 shares
authorized; none outstanding....................... -- --
Shareholders' equity:
Class A Common Stock, no par value, $1.00 stated
value, 150,000,000 shares authorized; 40,449,486
shares issued and outstanding; 45,649,486 shares
as adjusted...................................... 40,449 45,649
Class B Common Stock, no par value, $1.00 stated
value, 5,000,000 shares authorized; 1,777,510
shares issued and outstanding.................... 1,778 1,778
Additional paid-in capital........................ 311,076 486,723
Retained earnings................................. 245,509 245,509
Cumulative foreign translation adjustment......... (25,190) (25,190)
Unrealized appreciation of investments............ 282 282
---------- ----------
Total shareholders' equity...................... 573,904 754,751
---------- ----------
Total capitalization............................ $1,212,867 $1,212,867
========== ==========
</TABLE>
- --------
(1) Adjusted to reflect the sale of the Class A Common Stock offered hereby
and the application of the net proceeds of approximately $180.8 million
therefrom to repay a portion of the balance outstanding under the
Company's revolving lines of credit, which amount will then become
available to the Company to fund its continuing acquisition program and
for general corporate purposes.
(2) Long-term debt outstanding at April 30, 1997, excluding current
maturities, included $410.9 million under the Company's $600 million and
$10 million revolving lines of credit. The $600 million revolving line of
credit matures on April 30, 2002, contains a facility fee of 12.5 basis
points, and borrowings bear interest at the lead lending bank's prime
rate, or certain optional rates at the Company's election. As of June 12,
1997, borrowings under this revolving line of credit totalled $427 million
and had a weighted average interest rate of approximately 6.22%. The
Company also has available a $10 million revolving line of credit which
matures on December 31, 1997 and is used for interim cash advances in
amounts less than $5 million, which are cumulated periodically and
replaced with cash advances under the $600 million revolving line of
credit. As of June 12, 1997, $0.1 million was outstanding with a weighted
average interest rate of 6.0%. Long-term debt outstanding at April 30,
1997, excluding current maturities, also included (i) $42.9 million of
senior notes, bearing interest at 6.04% and maturing on November 30, 2003,
with principal payments of $7.143 million due on November 30 each year;
(ii) $75 million of senior notes with an average maturity of seven years,
a weighted average interest rate of 8.44%, and principal payments of $15
million due May 1, 1998, $16.7 million due on each of November 1, 2000 and
2001, $16.6 million due November 1, 2002 and $10 million due on November
1, 2006; and (iii) $100 million senior debt securities, bearing interest
at 6.70% due 2003. All of the Company's debt is unsecured, except for
approximately $2 million as of April 30, 1997, which was incurred
principally in connection with acquisitions.
9
<PAGE>
BUSINESS
THE COMPANY
The Company is the third largest provider of products and services in the
death care industry in North America. The Company is a leader in the
industry's movement toward consolidation, the integration of funeral home and
cemetery operations, the establishment of combined facilities, and complete
death care planning and delivery. Through its subsidiaries, the Company
operates 355 funeral homes and 125 cemeteries in 23 states, Puerto Rico,
Mexico, Australia, New Zealand, Canada and Spain. During fiscal year 1996, the
Company acquired 134 funeral homes and 15 cemeteries for an aggregate purchase
price of $179.0 million. During fiscal year 1997, as of June 12, 1997, the
Company has acquired 56 funeral homes and five cemeteries for an aggregate
purchase price of $119.6 million and has entered into agreements in principle
or letters of intent to acquire 12 funeral homes and two cemeteries for an
aggregate purchase price of approximately $23.3 million.
The Company believes that it is distinguishable from its competitors by the
quality of its funeral homes and cemeteries, the depth and experience of its
management team, its decentralized management structure, and the quality and
value of its products and services. The Company believes that it owns and
operates one or more of the premier death care facilities in each of its
principal markets, which serve as a centerpiece for a group or cluster of
other properties in the same metropolitan area. The Company considers a
funeral home or cemetery to be a "premier" facility if, when measured by such
factors as tradition, heritage, reputation, physical size, volume of business,
available inventory, name recognition, aesthetics and potential for
development or expansion, it is one of the most highly regarded facilities in
its market area.
The Company retains key managers of acquired companies and gives them
significant operational authority in order to assure the continuation of high
quality services and the maintenance of the acquired firm's reputation and
goodwill. The Company's 11 executive officers, five of whom joined the Company
through acquisitions, have an average of more than 24 years of experience in
the death care industry.
OPERATING STRATEGY
The Company's operating strategy is to build market share and increase
profit margins by marketing and providing, both prior to and at the time of
need, a complete range of death care products and services at competitive
prices. In order to achieve those objectives, the Company has acquired or
developed in most of its markets one or more premier facilities to serve as a
centerpiece for a cluster of other properties in the same area. Such
clustering provides certain economies of scale by, for example, enabling the
Company's facilities to share vehicles and employees, to reduce administrative
expenses, to centralize embalming services and to pool inventories of caskets
and other merchandise. Further, where feasible, the Company acquires, or
subsequently develops, combined operations in which a funeral home is located
at and is operated in conjunction with a Company-owned cemetery. Although
profit margins of cemetery operations are traditionally lower than those of
funeral homes, the Company's experience with combined operations has
demonstrated that the combination of a cemetery with a funeral home can
increase significantly the market share of the cemetery and funeral home and
provide cost savings through the sharing of facilities and other resources,
thereby increasing the overall profitability of both.
The Company's operating strategy also emphasizes a decentralized management
structure under which funeral home and cemetery operations are managed by four
regional division presidents, each of whom is an experienced death care
industry executive who has responsibility for all operations in his geographic
region. Although certain financial management and policy matters are
centralized, division presidents, local funeral home directors and cemetery
managers have substantial autonomy in the manner in which their products and
services are marketed and delivered and their funeral homes and cemeteries are
managed. The Company believes that this strategy permits each local firm to
maintain its unique style of operation and to capitalize on its reputation and
goodwill, while maintaining centralized supervisory controls and providing
specialized services at the corporate level.
10
<PAGE>
Effective January 1, 1997, the Company expanded its two North American
operating divisions to four. The new Western Division includes the Company's
operations in Canada and on the West Coast, which previously were part of the
Central Division. The new Southern Division includes the Company's operations
in Florida, Puerto Rico and Mexico, which previously were part of the Eastern
Division. These changes should enable the Company to more efficiently meet the
demands of future growth and support the Company's philosophy of decentralized
management.
The Company is a leader in the industry trend toward prearranged funeral
planning. The Company believes that extensive marketing of death care
prearrangements assures a backlog of future business and builds current and
future market share. The Company markets a complete range of death care
products and services on a prearranged basis through a staff of approximately
3,000 commission sales counselors. Prearranged plans are generally funded
through trust, escrow or insurance arrangements.
ACQUISITION STRATEGY
The Company's acquisition strategy is to expand in existing and new markets
by acquiring premier funeral homes and cemeteries that have the potential to
serve as a centerpiece for a group or cluster of other properties that may be
acquired subsequently in the same metropolitan area. From the Company's
initial public offering in October 1991 through June 12, 1997, it has acquired
304 funeral homes and 96 cemeteries and has entered 17 states, Puerto Rico and
five foreign countries.
The following table sets forth certain information with respect to the
Company's completed and pending acquisition activity.
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE
FUNERAL HOMES PURCHASE PRICE
AND CEMETERIES (IN MILLIONS)
-------------- --------------
<S> <C> <C>
Properties owned at
October 31, 1991......... 72 $ --
Acquisitions(1):
Fiscal year 1992........ 11 30.0
Fiscal year 1993........ 49 94.6
Fiscal year 1994........ 60 177.6
Fiscal year 1995........ 70 154.4
Fiscal year 1996........ 149 179.0
November 1, 1996--June
12, 1997............... 61 119.6
Pending acquisitions as
of June 12, 1997....... 14 23.3
</TABLE>
- --------
(1) Excludes funeral homes constructed by the Company.
----------------
The Company's acquisition strategy reflects a trend in the United States
death care industry of transition from small, family-owned firms to large,
professionally-managed, integrated, multiple-facility firms. Opportunities for
growth through the construction of new cemeteries and funeral homes are
limited because of a lack in many communities of available or reasonably
priced land with appropriate zoning and the existence of an adequate number of
funeral homes already serving a mature market. Accordingly, companies in the
death care industry can achieve significant growth only by increasing market
share through such means as acquisitions, extensive marketing of prearranged
products and services, and the development of combined operations.
In evaluating a potential acquisition, the Company also considers factors
such as the size of the community the property serves, the size and reputation
of the property in the community, the proximity of the property to other of
the Company's funeral homes or cemeteries, the opportunities for additional
acquisitions and growth in
11
<PAGE>
the community, and the potential for increasing the cemetery's profitability
through increasing prearranged marketing efforts. In keeping with the quality
of its existing properties, the Company is particularly careful about the
quality of the properties it seeks to acquire.
The Company believes that the consolidation trend that began in the United
States a number of years ago has now begun to evolve in other countries,
particularly in Europe, Canada, Australia, New Zealand and Mexico. The Company
has acquired a total of 151 funeral homes and cemeteries in Mexico, Australia,
New Zealand, Canada and Spain since it first entered foreign markets in the
fourth quarter of fiscal year 1994, and it believes that attractive expansion
opportunities exist in those and other foreign countries. During the first
half of fiscal year 1997, the Company entered the European market through the
acquisition of one of the largest independent funeral homes in Spain, and
expanded its presence in New Zealand and Australia with the acquisition of
another 12 funeral homes there. The Company will continue to explore expansion
opportunities in foreign countries, although it expects most of its expansion
to continue to occur domestically, with its primary focus on the midwestern
and western United States.
Because combined operations and individual funeral homes typically produce
higher profit margins and cash flow than individual cemetery operations, the
Company seeks primarily to acquire combined operations, premier cemeteries on
or adjacent to which it can build and operate a funeral home, or individual
funeral homes and cemeteries that form the basis for or strengthen a cluster
of death care facilities. Of the Company's 125 cemeteries, 53 are combined
operations.
OPERATIONS
Funeral Operations. The Company's funeral homes offer a complete range of
services to meet families' funeral needs, including prearrangement, family
consultation, the sale of caskets and related funeral products, the removal
and preparation of remains, the use of funeral home facilities for visitation
and worship, and transportation services. Most of the Company's funeral homes
have a non-denominational chapel on the premises, thereby permitting family
visitation and religious services to take place at one location, which reduces
transportation costs to the Company and inconvenience to the family.
In addition to traditional services, substantially all of the Company's
funeral homes offer cremation, which has become more common in the United
States in recent years. For the year ended October 31, 1996, cremations
accounted for approximately 21% of funeral services performed by the Company
in the United States. In Australia, New Zealand and Mexico, cremations
accounted for 63%, 71% and 46%, respectively, of funeral services performed by
the Company for the year ended October 31, 1996. In the fourth quarter of
fiscal year 1996, the Company entered two Canadian markets with the
acquisition of the Urgel Bourgie firm; historically, cremations have accounted
for approximately 50% of the funeral services performed by Urgel Bourgie. In
the second quarter of fiscal year 1997, the Company entered the European
market through the acquisition of one of the largest independent funeral homes
in Spain; historically, cremations have accounted for approximately 14% of the
funeral services performed by that funeral home. While cremations within the
United States often result in lower average revenue when compared to
traditional funeral services, they generally produce higher gross profit
margins than traditional funeral services. In the Company's foreign markets,
cremations generally produce revenues comparable to those of traditional
funeral services in those markets.
In addition to at-need sales, the Company markets funeral merchandise and
services as well as cemetery property and merchandise on a prearranged basis
through a staff of approximately 3,000 commission sales counselors.
Prearranged funeral plans enable families to establish in advance the type of
service to be performed, the products to be used and the cost of such products
and services in accordance with prices prevailing at the time the agreement is
signed rather than when the products and services are delivered. Prearranged
funeral plans permit families to eliminate the emotional strain of making
death care plans at the time of need. The Company believes that extensive
marketing of prearranged products and services produces a backlog of future
business and builds current and future market share. The Company sold 37,545
prearranged funeral services during the fiscal year ended October 31, 1996 and
19,873 during the first half of fiscal year 1997. At April 30, 1997, the
Company had a backlog of 336,211 prearranged funeral services expected to be
delivered some time in the future.
12
<PAGE>
Prearranged funeral plans generally are financed either through trust funds
or escrow accounts established by the Company, or through insurance. The
Company's selection of trust funds, escrow accounts or insurance depends
primarily on the regulatory requirements of each jurisdiction in which it
operates. In the case of trust- or escrow-funded plans, local law or contracts
with customers often require that all or a portion of the payments received by
the Company for prearranged funeral plans be placed in trust funds or escrow
accounts established by the Company. In certain jurisdictions where trust or
escrow arrangements are neither statutorily nor contractually required, the
Company typically deposits on a voluntary basis a portion of the payments
received into escrow accounts to fund the future delivery of prearranged
funeral plans.
Prearranged funeral trust funds and escrow accounts, which amounted to
approximately $399.0 million at April 30, 1997, are designed to provide
funding for the future delivery of prearranged funeral services sold by the
Company. When a prearranged funeral is funded through a trust fund or escrow
account, generally a percentage of the sale price, which is often paid in
installments, is retained by the Company to defray costs related to the sale,
and the remainder is placed in a trust fund or escrow account. The percentage
of the sale price placed in trust funds or in escrow accounts varies among the
different jurisdictions in which the Company operates.
The Company does not recognize revenue from the sale of prearranged funeral
services until delivery. The Company does not recognize revenue from sales of
prearranged funeral merchandise until delivery in jurisdictions where such
sales are revocable by the customer; where such sales are not revocable,
revenue is recognized currently. The Company recognizes as revenue on a
current basis all dividends and interest earned, and net capital gains
realized, by all prearranged funeral trust funds and escrow accounts except in
those jurisdictions where earnings revert to the customer if a prearranged
funeral service contract is canceled. Principal and earnings are withdrawn
only as funeral services are delivered or contracts are canceled, except in
jurisdictions that permit earnings to be withdrawn currently and in
unregulated jurisdictions where escrow accounts are used.
Funeral operations accounted for approximately 52% of the Company's revenues
during the fiscal year ended October 31, 1996 and 57% during the six months
ended April 30, 1997.
Cemetery Operations. The Company's cemetery operations involve the sale of
cemetery property and related cemetery merchandise, which includes lots, lawn
crypts, family and community mausoleums, monuments, memorials and burial
vaults, and interment services. Cemetery property and merchandise sales are
made at the time of need or on a prearranged basis. Prearranged sales
generally are financed by the Company through installment sale contracts, the
terms of which generally range from one to seven years. Prearranged sales
represented approximately 61% of cemetery revenue during the fiscal year ended
October 31, 1996.
Prearranged cemetery merchandise trust funds and escrow accounts, which
amounted to approximately $122.9 million at April 30, 1997, are designed to
provide funding for the future delivery of the prearranged merchandise sold by
the Company and are established in most of the jurisdictions in which the
Company operates. In certain jurisdictions, local law or contracts with
customers generally require that a portion of the sale price received be
placed in trust funds or escrow accounts; however, in other jurisdictions
where trust or escrow arrangements are neither statutorily nor contractually
required, the Company typically makes deposits on a voluntary basis into
escrow accounts. The Company recognizes as revenue on a current basis all
dividends and interest earned, and net capital gains realized, by prearranged
merchandise trust funds or escrow accounts. At the same time, the liability
for the estimated cost to deliver merchandise is adjusted through a charge to
earnings to reflect inflationary merchandise cost increases. The principal and
earnings are withdrawn only as the merchandise is delivered or contracts are
canceled.
13
<PAGE>
The Company also provides maintenance of cemetery grounds pursuant to
perpetual care contracts and laws, or on a voluntary basis where trust or
escrow arrangements are neither contractually nor statutorily required, by
placing a portion, generally 10%, of the proceeds from cemetery property sales
into perpetual care trust funds or escrow accounts. The income from these
funds, which have been established in most jurisdictions in which the Company
operates cemeteries, is used for maintenance of those cemeteries, but
principal, including in some jurisdictions net realized capital gains,
generally must be held in perpetuity. The Company recognizes and withdraws
currently all dividend and interest income earned and, where permitted, net
capital gains realized by perpetual care funds. Perpetual care trust funds and
escrow accounts amounted to $146.5 million at April 30, 1997.
Cemetery operations accounted for 48% of the Company's revenues during the
fiscal year ended October 31, 1996 and 43% during the six months ended April
30, 1997.
Combined Funeral and Cemetery Operations. Of the Company's 125 cemeteries,
53 are combined operations, including nine developed by the Company from
October 1991 through June 1997 through the construction of funeral homes on
the grounds of Company-owned cemeteries. Many of these facilities are in the
Company's key markets, including New Orleans, Louisiana; Dallas, Fort Worth
and Houston, Texas; Miami, Orlando, Tampa and St. Petersburg, Florida;
Nashville and Knoxville, Tennessee; Mobile, Alabama; Baltimore, Maryland;
Philadelphia, Pennsylvania; Portland, Oregon; Los Angeles and San Francisco,
California; Santa Fe, New Mexico; and Washington, D.C.
The Company began to develop and acquire combined facilities in 1979 because
it believed that the operation of such facilities would permit it to increase
market share through the delivery of better and more convenient services at
competitive prices. Although profit margins of cemetery operations typically
are lower than those of funeral homes, the Company's experience with combined
operations has demonstrated that the combination of a cemetery with a funeral
home can increase significantly the market share of the cemetery and funeral
home, thereby increasing the overall profitability of both. The enhanced
purchasing power, more sophisticated management systems and sharing of
facilities, personnel and equipment made possible by integration and combined
facilities results in lower average operating costs to the Company and allows
the Company to offer families the convenience of complete funeral home and
cemetery planning and services from a single supplier at a competitive price.
Foreign Operations. Since the Company first entered foreign markets in the
fourth quarter of fiscal year 1994, the Company has acquired a total of 151
funeral homes and cemeteries in Mexico, Australia, New Zealand, Canada and
Spain. The Company's foreign operations generated approximately 10% of total
revenues during the year ended October 31, 1996 and 15% during the first half
of fiscal year 1997. In addition, foreign operations accounted for
approximately 34% of the Company's funeral homes and cemetery locations and
approximately 18% of consolidated total assets as of October 31, 1996. See
Note 13 to the consolidated financial statements included in Item 8 of the
Company's Form 10-K for the year ended October 31, 1996.
In addition to the risks generally associated with foreign operations,
fluctuations in the value of the foreign currency of the country in which the
Company operates relative to the U.S. dollar can affect the value, in U.S.
dollar terms, of the earnings derived from the foreign operations and can
result in foreign currency translation adjustments that affect the Company's
shareholders' equity or, in the case of operations in highly inflationary
economies, net earnings. Based on the three-year cumulative inflation rate in
Mexico as of October 31, 1996, the Company was required, during the first
quarter of fiscal year 1997, to change its method of reporting foreign
currency translation adjustments for its Mexican operations to the method
prescribed for highly inflationary economies. As a result, foreign currency
translation adjustments for the Company's Mexican operations for the first
half of fiscal year 1997 were reflected in results of operations, instead of
in shareholders' equity. Management does not expect this change to have a
material effect on the Company's results of operations for fiscal year 1997.
There can be no assurance that expansion into foreign markets will yield
results comparable to those realized as a result of the Company's expansion in
the United States.
14
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain statements made herein that are not historical facts are intended to
be forward-looking statements within the meaning of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. 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, 1997.
SELLING SHAREHOLDERS
Of the 5,700,000 shares of Class A Common Stock offered hereby, 5,200,000
are being sold by the Company, 150,000 shares are being sold by Frank B.
Stewart, Jr., the Chairman of the Board of the Company, and 350,000 shares are
being sold by the Frank B. Stewart, Jr. Charitable Remainder Unitrust, a trust
established by Mr. and Mrs. Stewart (the "Trust"). At May 21, 1997, Mr.
Stewart beneficially owned 4,372,148 shares of Class A Common Stock, or
approximately 10.8% of the Class A Common Stock outstanding, and after
completion of the offering, Mr. Stewart will own 3,872,148 shares of Class A
Common Stock, or approximately 8.5% of the Class A Common Stock outstanding.
The Trust currently owns 350,000 shares of Class A Common Stock and after
completion of the Offering will own no such shares.
Additionally, Mr. Stewart owns all of the 1,777,510 shares of Class B Common
Stock outstanding and will continue to own such shares after completion of the
offering. By virtue of his ownership of Class A and Class B Common Stock, at
May 21, 1997, Mr. Stewart held approximately 38.0% of the total voting power
of the Company. Mr. Stewart will continue to hold approximately 34.1% of such
voting power after completion of this offering.
15
<PAGE>
UNDERWRITING
The Underwriters of the offering of the Class A Common Stock (the
"Underwriters"), for whom Bear, Stearns & Co. Inc., Goldman, Sachs & Co., ABN
AMRO Chicago Corporation, and Johnson Rice & Company L.L.C. are acting as
representatives (collectively, the "Representatives"), have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company and the Selling Shareholders the number of shares of Class A
Common Stock set forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Bear, Stearns & Co. Inc.................................... 1,016,750
Goldman, Sachs & Co........................................ 1,016,750
ABN AMRO Chicago Corporation............................... 1,016,750
Johnson Rice & Company L.L.C............................... 1,016,750
Alex. Brown & Sons Incorporated............................ 142,000
Credit Suisse First Boston Corporation..................... 142,000
A.G. Edwards & Sons, Inc................................... 142,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated......... 142,000
Morgan Stanley & Co. Incorporated.......................... 142,000
Nesbitt Burns Securities Inc............................... 142,000
Raymond James & Associates, Inc............................ 142,000
Wasserstein Perella Securities, Inc........................ 142,000
William Blair & Company, L.L.C............................. 71,000
J.C. Bradford & Co......................................... 71,000
Doley Securities, Inc...................................... 71,000
Furman Selz LLC............................................ 71,000
Neuberger & Berman L.L.C................................... 71,000
The Robinson-Humphrey Company, Inc......................... 71,000
Sanders Morris Mundy Inc................................... 71,000
---------
Total.................................................... 5,700,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that, if any of the foregoing
shares of Class A Common Stock are purchased by the Underwriters pursuant to
the Underwriting Agreement, all such shares must be so purchased. The Company
and the Selling Shareholders have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Underwriters may be required to make in
respect thereof.
The Company and the Selling Shareholders have been advised that the
Underwriters propose to offer the shares of Class A Common Stock to the public
initially at the public offering price set forth on the cover page of this
Prospectus and to certain selected dealers (who may include the Underwriters)
at such public offering price less a concession not to exceed $.93 per share.
The selected dealers may reallow a concession to certain other dealers not to
exceed $.10 per share. After the initial offering to the public, the public
offering price, the concession to selected dealers and the reallowance to
other dealers may be changed by the Representatives.
The Company has granted to the Underwriters an option to purchase up to
855,000 additional shares of Class A Common Stock at the public offering price
less the underwriting discounts and commissions set forth on the cover page of
this Prospectus, solely for the purpose of covering over-allotments, if any.
Such option may be exercised at any time until 30 days after the date of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will be committed, subject to certain conditions, to purchase
a number of additional shares proportionate to such Underwriter's initial
commitment as indicated in the preceding table.
16
<PAGE>
In order to facilitate the offering, certain persons participating in the
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the Class A Common Stock during and after the offering.
Specifically, the Underwriters may over-allot or otherwise create a short
position in the Class A Common Stock for their own account by selling more
shares of Class A Common Stock than have been sold to them by the Company and
the Selling Shareholders. The Underwriters may elect to cover any such short
position by purchasing shares of Class A Common Stock in the open market or by
exercising the over-allotment option granted to the Underwriters by the
Company. In addition, such persons may stabilize or maintain the price of the
Class A Common Stock by bidding for or purchasing shares of Class A Common
Stock in the open market and may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers participating
in the offering are reclaimed, if shares of Class A Common Stock previously
distributed in the offering are repurchased in connection with stabilization
transactions or otherwise. The effect of these transactions may be to
stabilize or maintain the market price of the Class A Common Stock at a level
above that which might otherwise prevail in the open market. The imposition of
a penalty bid may also affect the price of the Class A Common Stock to the
extent that it discourages resales thereof. No representation is made as to
the magnitude or effect of any such stabilization or other transactions. Such
transactions may be effected on the Nasdaq National Market or otherwise and,
if commenced, may be discontinued at any time.
In connection with the offering, the Company and its directors and executive
officers, beneficially owning in the aggregate approximately 14.7% of the
Class A Common Stock and 100% of the Class B Common Stock, have agreed that
they will not sell, contract to sell or otherwise dispose of any shares of
capital stock of the Company for a period of 90 days after the date of this
Prospectus without the prior written consent of the Underwriters, except for
the shares offered hereby, issuances or sales by the Company upon the exercise
of outstanding stock options, grants of employee stock options, or issuances
or sales by the Company in connection with acquisitions.
Michael O. Read, a director of the Company, is a brother-in-law of a partner
of Johnson Rice & Company L.L.C., one of the Underwriters. Johnson Rice &
Company L.L.C. will be paid a portion of the underwriting discounts and
commissions in connection with this offering. Certain of the Underwriters have
engaged in transactions with and performed various investment banking and
other services for the Company in the past, and may do so from time to time in
the future.
ABN AMRO Chicago Corporation is an affiliate of ABN AMRO Bank, N.V. ("ABN
AMRO"), which is a lender to the Company under the $600 million revolving line
of credit. ABN AMRO will receive its proportionate share of any repayment by
the Company of amounts outstanding under such line of credit from the proceeds
of the offering of the Class A Common Stock offered hereby by the Company. In
addition, ABN AMRO or its affiliates participate from time to time in various
general financing and banking transactions for the Company and its affiliates.
LEGAL MATTERS
The validity of the Class A Common Stock offered hereby will be passed upon
for the Company by Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P., New Orleans, Louisiana. Certain legal matters in connection with this
offering will be passed upon for the Underwriters by Jenkens & Gilchrist, a
Professional Corporation, Dallas, Texas.
INDEPENDENT ACCOUNTANTS
The audited consolidated financial statements and financial statement
schedule of the Company incorporated by reference in this Registration
Statement have been audited by Coopers & Lybrand L.L.P., independent
accountants, as stated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of such firm
as experts in accounting and auditing.
17
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
SHAREHOLDERS OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
UNDER NO CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE
PURSUANT TO THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
Prospectus Summary......................................................... 3
Use of Proceeds............................................................ 7
Price Range of Common Stock
and Dividend Policy....................................................... 8
Capitalization............................................................. 9
Business................................................................... 10
Selling Shareholders....................................................... 15
Underwriting............................................................... 16
Legal Matters.............................................................. 17
Independent Accountants.................................................... 17
</TABLE>
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5,700,000 SHARES
[LOGO OF STEWART ENTERPRISES APPEARS HERE]
STEWART
ENTERPRISES,
INC.
CLASS A
COMMON STOCK
---------------
PROSPECTUS
---------------
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
ABN AMRO CHICAGO CORPORATION
JOHNSON RICE & COMPANY L.L.C.
JUNE 19, 1997
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