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): JUNE 9, 1999
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)
<PAGE>
ITEM 5. OTHER EVENTS
On June 9, 1999 the Company issued the following press release.
CONTACT: Kenneth C. Budde
Stewart Enterprises, Inc.
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
504/837-5880
FOR IMMEDIATE RELEASE
STEWART ENTERPRISES REPORTS SECOND QUARTER FISCAL YEAR 1999 RESULTS-
REVENUES INCREASE 31 PERCENT, OPERATING EARNINGS INCREASE 35 PERCENT, NET
EARNINGS INCREASE 33 PERCENT
Metairie, Louisiana, June 9, 1999 . . . Stewart Enterprises, Inc. (Nasdaq
NMS: STEI) today announced that revenues for the second quarter of 1999 as
compared to the second quarter of 1998 increased 31 percent to $202.3
million from $154.6 million. Operating earnings increased 35 percent to
$61.3 million from $45.4 million, net earnings increased 33 percent to $32.2
million from $24.3 million, and diluted earnings per share increased 16
percent to $.29 from $.25, exclusive of the $76.8 million ($50.3 million or
$.51 per share, after tax) non-recurring, non-cash stock option charge
recorded in the second quarter of 1998 in connection with the vesting of the
Company's performance-based stock options.
Second quarter diluted per share performance reflects a 15% increase in the
weighted average number of shares outstanding from 97.5 million to 112.2
million, due principally to the Company's equity offering completed in
February 1999.
Year-to-date revenues increased 27 percent to $385.2 million, from $303.9
million for the comparable period last fiscal year. Operating earnings
increased 33 percent to $116.3 million, net earnings increased 27 percent to
$58.7 million and diluted earnings per share increased 19 percent to $.56,
from $87.5 million, $46.2 million and $.47, respectively, reported for the
first half of fiscal year 1998, before giving effect to the stock option
charge recorded during the second quarter of fiscal year 1998.
Fiscal year-to-date diluted per share performance reflects an 8% increase in
the weighted average number of shares outstanding from 97.5 million to 105.3
million, due principally to the Company's equity offering completed in
February 1999.
Joseph P. Henican, III, Chief Executive Officer, commented, "We have
delivered consistent and predictable results since our IPO in 1991. During
the second quarter of 1999, we generated 30%+ increases in revenue, gross
profit and net earnings. This was accomplished in the largest quarter for
acquisitions in our Company's history with the acquisition of 62 businesses
for $111.3 million."
"We are particularly pleased with the second quarter revenue growth produced
in both our funeral and cemetery segments of 32% and 29%, respectively, and
our overall margin improvement. We were able to improve our operating
margins by 90 basis points to 30.3% from 29.4% in the comparable quarter of
1998. This was especially gratifying in light of the 160 basis point
improvement we achieved in the second quarter of 1998 compared to the second
quarter of 1997 operating margin of 27.8%."
Mr. Henican added, "Now more than ever, we believe that the strong results
we have continued to achieve quarter after quarter are due to our focus on a
disciplined and balanced growth strategy and are a product of our 90 years
of experience serving families at their time of need."
William E. Rowe, President and Chief Operating Officer, commented, "Thus
far in fiscal year 1999, we have acquired or committed to acquire 79 funeral
homes and 21 cemeteries for an aggregate purchase price of approximately
$167.5 million. These businesses are expected to generate annualized
revenues of approximately $76.0 million and serve nearly 23,000 families
worldwide."
"We have continued to focus on domestic acquisitions principally in the West
and Midwest, while at the same time increasing our presence abroad. During
the second quarter, we completed two strategic domestic acquisitions,
Wisconsin Memorial Park and D.W. Newcomer's Sons, Inc., both within our new
pricing parameters. We have remained steadfast in our adherence to the new
lower pricing. We are committed to the principles of discipline and balance
and the prudent operation of our businesses over the long-term."
Mr. Rowe continued, "Wisconsin Memorial Park, located in Milwaukee,
Wisconsin, is Stewart's second largest cemetery and will enable us to serve
more than 2,800 families annually. With this acquisition, we entered
Wisconsin, bringing the total number of states in which we operate to
thirty. D.W. Newcomer's Sons, Inc. is Stewart's largest domestic acquisition
to date. This acquisition, which consists of 26 facilities (eight funeral
homes, four cemeteries and seven combination funeral home and cemetery
operations), will enable us to build on our total death care concept by
reaping the synergies from clustering, the convenience of combinations, and
enhancing our pre-need sales opportunities while serving over 5,900 families
annually."
"Year-to-date, we have expanded our presence in Europe with the acquisition
of 34 funeral homes in Belgium, France, and Spain. These acquisitions have
allowed us to serve 4,500 additional families and will increase the total
families served in Europe on an annual basis to over 24,500."
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 625 funeral homes and 157 cemeteries in North America,
South America, Europe and the Pacific Rim.
- -------------------------------------------------------------------------------
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 January 31, 1999. The
Company assumes no obligation to update information contained herein.
###
- -------------------------------------------------------------------------------
<PAGE>
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Revenues:
Funeral $ 121,158 $ 91,752
Cemetery 81,099 62,826
----------- -----------
Total revenues 202,257 154,578
----------- -----------
Costs and expenses:
Funeral 80,114 61,209
Cemetery 56,515 43,823
----------- -----------
Total costs and expenses 136,629 105,032
----------- -----------
Gross profit 65,628 49,546
Corporate general and administrative expenses 4,333 4,144
----------- -----------
Operating earnings before performance-based stock options 61,295 45,402
Performance-based stock options - 76,762
----------- -----------
Operating earnings (loss) 61,295 (31,360)
Interest expense (12,795) (10,081)
Investment and other income 2,150 1,676
----------- -----------
Earnings (loss) before income taxes 50,650 (39,765)
Income taxes 18,487 (13,719)
----------- -----------
Net earnings (loss) $ 32,163 $ (26,046)
=========== ===========
Earnings (loss) per share:
Basic $ 0.29 $ (0.27)
=========== ===========
Diluted $ 0.29 $ (0.27)
=========== ===========
Weighted average shares outstanding (in thousands):
Basic 111,707 97,547
=========== ===========
Diluted 112,192 97,547
=========== ===========
Dividends per common share $ 0.02 $ 0.01
=========== ===========
</TABLE>
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended April 30,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Revenues:
Funeral $ 232,641 $ 178,670
Cemetery 152,537 125,217
----------- -----------
Total revenues 385,178 303,887
----------- -----------
Costs and expenses:
Funeral 153,372 120,070
Cemetery 107,188 88,154
----------- -----------
Total costs and expenses 260,560 208,224
----------- -----------
Gross profit 124,618 95,663
Corporate general and administrative expenses 8,348 8,168
----------- -----------
Operating earnings before performance-based stock options 116,270 87,495
Performance-based stock options - 76,762
----------- -----------
Operating earnings 116,270 10,733
Interest expense (27,195) (20,027)
Investment and other income 3,334 3,034
----------- -----------
Earnings (loss) before income taxes 92,409 (6,260)
Income taxes 33,729 (2,160)
----------- -----------
Net earnings (loss) $ 58,680 $ (4,100)
=========== ===========
Earnings (loss) per share
Basic $ 0.56 $ (0.04)
=========== ===========
Diluted $ 0.56 $ (0.04)
=========== ===========
Weighted average shares outstanding (in thousands):
Basic 104,687 97,473
=========== ===========
Diluted 105,286 97,473
=========== ===========
Dividends per common share $ 0.04 $ 0.02
=========== ===========
</TABLE>
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.
June 09, 1999 /s/ KENNETH C. BUDDE
-------------------------
Kenneth C. Budde
Executive Vice President
President-Corporate Division
Chief Financial Officer
