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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): JANUARY 6, 2000
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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<PAGE>
ITEM 5. OTHER EVENTS
The Company changed the following accounting principle effective
November 1, 1998:
The Company now defers all of the earnings realized by irrevocable
prearranged funeral trust funds until the underlying funeral service is
delivered. Previously, the Company recognized a portion of those earnings
and deferred the remainder to offset the estimated future effects of
inflation.
The cumulative effect of this change on years prior to the year ended
October 31, 1999, resulted in a decrease in net earnings for the year ended
October 31, 1999, of $50.1 million (net of a $28.8 million income tax
benefit), or $.47 per share. The effect of the change in accounting
principle for the year ended October 31, 1999, resulted in a decrease in net
earnings of $16.2 million, or $.15 per share, for the year.
The following statements of earnings for fiscal year 1998 and 1999
periods are presented on a pro forma basis to reflect the change in the
Company's accounting principle, as if such principle had been in effect
during all prior periods.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY 31, 1998 APRIL 30, 1998 APRIL 30, 1998
---------------- -------------- --------------
<S> <C> <C> <C>
Revenues:
Funeral ........................................ $ 85,078 $ 87,379 $ 172,457
Cemetery ....................................... 62,391 62,826 125,217
----------- ----------- ------------
147,469 150,205 297,674
----------- ----------- ------------
Costs and expenses:
Funeral ........................................ 58,861 61,209 120,070
Cemetery ....................................... 44,331 43,823 88,154
----------- ----------- ------------
103,192 105,032 208,224
----------- ----------- ------------
Gross profit ................................... 44,277 45,173 89,450
Corporate general and administrative expenses .... 4,024 4,144 8,168
----------- ----------- ------------
Operating earnings before performance-based
stock options ................................. 40,253 41,029 81,282
Performance-based stock options .................. - 76,762 76,762
----------- ----------- ------------
Operating earnings ............................. 40,253 (35,733)(1) 4,520(1)
Interest expense, net ............................ (9,411) (9,289) (18,700)
Other income ..................................... 823 884 1,707
----------- ----------- ------------
Earnings before income taxes ................... 31,665 (44,138)(1) (12,473)(1)
Income taxes ..................................... 10,924 (15,227) (4,303)
----------- ----------- ------------
Net earnings ................................... $ 20,741 $ (28,911)(1) $ (8,170)(1)
=========== =========== ============
Net earnings per share:
Basic .......................................... $ 0.21 $ (0.30)(1) $ (0.08)(1)
=========== =========== ============
Diluted ........................................ $ 0.21 $ (0.30)(1) $ (0.08)(1)
=========== =========== ============
Weighted average shares outstanding (in thousands):
Basic .......................................... 97,401 97,547 97,473
=========== =========== ============
Diluted ........................................ 98,134 97,547 97,473
=========== =========== ============
</TABLE>
- --------------------
(1) Includes a nonrecurring, noncash charge of $76,762 ($50,279, or $.51
per share, after tax) recorded during the second quarter of fiscal year
1998 in connection with the vesting of the Company's performance-based
stock options.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
JULY 31, 1998 JULY 31, 1998
------------- -------------
<S> <C> <C>
Revenues:
Funeral ..................................................... $ 91,966 $ 264,423
Cemetery .................................................... 72,527 197,744
----------- -----------
164,493 462,167
----------- -----------
Costs and expenses:
Funeral ..................................................... 66,191 186,261
Cemetery .................................................... 51,566 139,720
----------- -----------
117,757 325,981
----------- ------------
Gross profit ................................................ 46,736 136,186
Corporate general and administrative expenses ................... 4,139 12,307
----------- ------------
Operating earnings before performance-based stock options ... 42,597 123,879
Performance-based stock options ................................. - 76,762
----------- ------------
Operating earnings .......................................... 42,597 47,117(1)
Interest expense, net ........................................... (10,827) (29,527)
Other income .................................................... 1,057 2,764
----------- ------------
Earnings before income taxes ................................ 32,827 20,354(1)
Income taxes .................................................... 11,447 7,144
----------- ------------
Net earnings ................................................ $ 21,380 $ 13,210(1)
=========== ============
Net earnings per share:
Basic ....................................................... $ 0.22 $ 0.14(1)
=========== ============
Diluted ..................................................... $ 0.22 $ 0.13(1)
=========== ============
Weighted average shares outstanding (in thousands):
Basic ....................................................... 97,784 97,578
=========== ============
Diluted ..................................................... 98,616 98,368
=========== ============
</TABLE>
- --------------------
(1) Includes a nonrecurring, noncash charge of $76,762 ($50,279, or $.51
per share, after tax) recorded during the second quarter of fiscal year
1998 in connection with the vesting of the Company's performance-based
stock options.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS YEAR
ENDED ENDED
OCTOBER 31, 1998 OCTOBER 31, 1998
---------------- ----------------
<S> <C> <C>
Revenues:
Funeral ..................................................... $ 101,180 $ 365,603
Cemetery .................................................... 71,526 269,270
------------- ------------
172,706 634,873
------------- ------------
Costs and expenses:
Funeral ..................................................... 74,408 260,669
Cemetery .................................................... 51,992 191,712
------------- ------------
126,400 452,381
------------- ------------
Gross profit ................................................ 46,306 182,492
Corporate general and administrative expenses ................... 4,314 16,621
------------- ------------
Operating earnings before performance-based stock options ... 41,992 165,871
Performance-based stock options ................................. - 76,762
------------- ------------
Operating earnings .......................................... 41,992 89,109(1)
Interest expense, net ........................................... (12,265) (41,792)
Other income .................................................... 1,391 4,155
------------- ------------
Earnings before income taxes ................................ 31,118 51,472(1)
Income taxes .................................................... 11,129 18,273
------------- ------------
Net earnings ................................................ $ 19,989 $ 33,199(1)
============= ============
Net earnings per share:
Basic ....................................................... $ 0.20 $ 0.34(1)
============= ============
Diluted ..................................................... $ 0.20 $ 0.34(1)
============= ============
Weighted average shares outstanding (in thousands):
Basic ....................................................... 98,026 97,691
============= =============
Diluted ..................................................... 98,674 98,444
============= =============
</TABLE>
- ----------------------------
(1) Includes a nonrecurring, noncash charge of $76,762 ($50,279, or $.51
per share, after tax) recorded during the second quarter of fiscal year
1998 in connection with the vesting of the Company's performance-based
stock options.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY 31, 1999 APRIL 30, 1999 APRIL 30, 1999
---------------- -------------- --------------
<S>
Revenues: <C> <C> <C>
Funeral ................................................ $ 106,734 $ 113,198 $ 219,932
Cemetery ............................................... 71,438 81,099 152,537
---------- ---------- ----------
178,172 194,297 372,469
---------- ---------- ----------
Costs and expenses:
Funeral ................................................ 73,258 80,114 153,372
Cemetery ............................................... 50,673 56,515 107,188
---------- ---------- ----------
123,931 136,629 260,560
---------- ---------- ----------
Gross profit ........................................... 54,241 57,668 111,909
Corporate general and administrative expenses ............ 4,015 4,333 8,348
---------- ---------- ----------
Operating earnings ..................................... 50,226 53,335 103,561
Interest expense, net .................................... (13,806) (11,688) (25,494)
Other income ............................................. 590 1,043 1,633
---------- ---------- ----------
Earnings before income taxes ........................... 37,010 42,690 79,700
Income taxes ............................................. 13,509 15,582 29,091
---------- ---------- ----------
Net earnings ........................................... $ 23,501(2) $ 27,108 $ 50,609(2)
========== ========== ==========
Net earnings per share:
Basic .................................................. $ 0.24(2) $ 0.24 $ 0.48(2)
========== ========== ==========
Diluted ................................................ $ 0.24(2) $ 0.24 $ 0.48(2)
========== ========== ==========
Weighted average shares outstanding (in thousands):
Basic .................................................. 98,045 111,707 104,687
========== ========== ==========
Diluted ................................................ 98,721 112,192 105,286
========== ========== ==========
</TABLE>
- ------------------------------------
(2) Excludes the cumulative effect of the change in accounting principle
on prior years, which resulted in a decrease in net earnings for the year
ended October 31, 1999, of $50,101 (net of a $28,798 income tax benefit),
or $.51 per share in the three months ended January 31, 1999, $.48 per
share in the six months ended April 30, 1999, and $.47 per share in the
nine months ended July 31, 1999, and the year ended October 31, 1999.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
JULY 31, 1999 JULY 31, 1999
------------- -------------
<S> <C> <C>
Revenues:
Funeral ......................................... $ 112,099 $ 332,031
Cemetery ........................................ 81,622 234,159
------------- -------------
193,721 566,190
------------- -------------
Costs and expenses:
Funeral ......................................... 80,668 234,040
Cemetery ........................................ 59,379 166,567
------------- -------------
140,047 400,607
------------- -------------
Gross profit .................................... 53,674 165,583
Corporate general and administrative expenses ....... 5,012 13,360
------------- -------------
Operating earnings .............................. 48,662 152,223
Interest expense, net ............................... (13,224) (38,718)
Other income ........................................ 1,328 2,961
------------- -------------
Earnings before income taxes .................... 36,766 116,466
Income taxes ........................................ 13,419 42,510
------------- -------------
Net earnings .................................... $ 23,347 $ 73,956(2)
============= =============
Net earnings per share:
Basic ........................................... $ 0.21 $ 0.69(2)
============= =============
Diluted ......................................... $ 0.21 $ 0.69(2)
============= =============
Weighted average shares outstanding (in thousands):
Basic ........................................... 111,752 107,068
============= =============
Diluted ......................................... 112,196 107,604
============= =============
</TABLE>
- ---------------------
(2) Excludes the cumulative effect of the change in accounting principle
on prior years, which resulted in a decrease in net earnings for the year
ended October 31, 1999, of $50,101 (net of a $28,798 income tax benefit),
or $.51 per share in the three months ended January 31, 1999, $.48 per
share in the six months ended April 30, 1999, and $.47 per share in the
nine months ended July 31, 1999, and the year ended October 31, 1999.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1999
---------------- ----------------
(AS REPORTED)
<S> <C> <C>
Revenues:
Funeral ..................................... $ 113,846 $ 445,877
Cemetery .................................... 76,072 310,231
------------- ------------
189,918 756,108
------------- ------------
Costs and expenses:
Funeral ..................................... 84,962 319,002
Cemetery .................................... 60,138 226,705
------------- ------------
145,100 545,707
------------- ------------
Gross profit ................................ 44,818 210,401
Corporate general and administrative expenses ... 5,801 19,161
------------- ------------
Operating earnings .......................... 39,017 191,240
Interest expense, net ........................... (13,456) (52,174)
Other income 524 3,485
------------- ------------
Earnings before income taxes ................ 26,085 142,551
Income taxes .................................... 9,521 52,031
------------- ------------
Net earnings ................................ $ 16,564 $ 90,520(2)
============= ============
Net earnings per share:
Basic ....................................... $ 0.15 $ 0.84(2)
============= ============
Diluted ..................................... $ 0.15 $ 0.84(2)
============= ============
Weighted average shares outstanding (in thousands):
Basic ....................................... 108,445 107,452
============= ============
Diluted ..................................... 108,445 107,834
============= ============
</TABLE>
- -------------------------
(2) Excludes the cumulative effect of the change in accounting principle
on prior years, which resulted in a decrease in net earnings for the year
ended October 31, 1999, of $50,101 (net of a $28,798 income tax benefit),
or $.51 per share in the three months ended January 31, 1999, $.48 per
share in the six months ended April 30, 1999, and $.47 per share in the
nine months ended July 31, 1999, and the year ended October 31, 1999.
<PAGE>
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.
January 6, 2000 /s/ MICHAEL G. HYMEL
------------------------
Michael G. Hymel
Vice President -
Corporate Controller and
Chief Accounting Officer
