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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): AUGUST 12, 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)
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ITEM 5. OTHER EVENTS
On August 12, 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 REVISES EARNINGS ESTIMATES FOR THE THIRD AND FOURTH
QUARTERS OF 1999
Metairie, Louisiana, August 12, 1999 . . . Stewart Enterprises, Inc.
(Nasdaq NMS: STEI) today announced that it expects to report earnings per
share of $.25 to $.27 for the third quarter ended July 31, 1999 compared to
$.25 for the same period in 1998. The Company also announced that it
expects to report earnings per share of $.17 to $.19 for the fourth quarter
of 1999 compared to $.22 for the same period in 1998.
Earnings per share for fiscal year 2000 are expected to increase about 5%
compared to fiscal year 1999 earnings, and the Company currently
anticipates earnings per share growth of 10 to 12 percent going forward
from there, as compared with the 20 percent growth rates achieved in recent
years. Notwithstanding those expectations, the Company stated that it will
continue to initiate innovative business strategies with a goal of
returning to higher sustainable growth rates. The Company anticipates
announcing earnings and conducting its usual conference call for the
quarter ended July 31, 1999, during the week of September 6, 1999.
In explaining the reasons for its downward revisions of anticipated growth
rates, the Company stated that it believes that the fundamentals of its
business and the long-term prospects of the death care industry remain
strong, but recent changes in industry trends and the Company's ability to
respond to those trends in the short term have caused management to revise
its short and medium-term expectations.
Those trends are the intense and growing price competition from low-cost
funeral providers and casket stores in selected markets, the continuing and
accelerating trend toward cremation and a shift by customers to lower-priced
services and merchandise, all of which have negatively affected at-need
funeral revenues in certain markets. Although intense competition is normal
in every facet of the death care business, the recent shortfalls in funeral
revenue produced by the combination of these events have caused management
to reassess their long-term implications and the Company's strategies for
responding to these changing competitive conditions. Furthermore, in
selected key markets such as Miami, Dallas, and Buenos Aires, the Company
has not achieved preneed sales targets. As a result, management has made
key sales management changes and provided additional sales support in these
markets.
Joseph P. Henican, III, Chief Executive Officer, noted, "The Company is
faced today with new and rapidly changing issues such as changes in customer
preferences, a new acquisition environment and new funeral competition in
certain markets. Some of these changes were unanticipated and have put
pressure on our earnings growth rate, but we are developing strategies to
deal with them, while remaining focused on our commitment to serving
families."
Mr. Henican added, "We are, first and foremost, owners and operators of
funeral homes and cemeteries. There is an absolute and inevitable need for
the products and services that we provide. The demographics of the
population are working in our favor in both the at-need and preneed aspects
of our business. The funeral home and cemetery combination operation
continues to be a powerful business model. Although our business has always
been challenging, Stewart has a long successful history as a leading preneed
seller. There are many new marketing and merchandising opportunities
available to serve the growing number of cremation customers in many of our
markets, and we have built an excellent franchise in many of the high crema-
tion markets in which we operate. The challenge now, which we expect to meet,
is to develop the right range of products and services for that market and
to price them at levels that are attractive to our customers and us."
William E. Rowe, President and Chief Operating Officer, commented, "We are
not satisfied with the Company's performance in the current environment and
are developing action plans to address each of the issues that have slowed
our growth. Moreover, we are testing new marketing and merchandising
programs in selected markets designed to enhance revenues without raising
prices."
Mr. Rowe continued, "We have developed internal strategies, including third
party programs, the development of alternative service firms, the creation of
new combination operations and the continued improvement in our existing
firms. At the present time, there are fewer opportunities to acquire
businesses, primarily because we have adhered to stricter pricing criteria
over the last six months. This has caused us to reemphasize the pursuit of
internal opportunities in the meantime. Our re-balancing between internal and
external strategies is designed to enable us to continue to build the Company
for the future."
Mr. Henican went on to say, "Although we are disappointed that the results
for the third and fourth quarters of this year will not meet consensus
expectations, we remain a very strong company financially, serving 200,000
families annually, with expected net earnings in excess of $100 million for
fiscal year 1999. And, we are firmly committed to continuing the long-term
growth of Stewart Enterprises and achieving attractive sustainable growth
rates in earnings that will maximize 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 630 funeral homes and 157 cemeteries in North America,
South 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 April 30, 1999. The
Company assumes no obligation to update information contained herein
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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.
August 12, 1999 /s/ Kenneth C. Budde
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KENNETH C. BUDDE
EXECUTIVE VICE PRESIDENT
CHIEF FINANCIAL OFFICER
