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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): MARCH 14, 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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ITEM 5. OTHER EVENTS
On March 14, 2000, the Company issued the following press release.
CONTACT: Kenneth C. Budde FOR IMMEDIATE RELEASE
Stewart Enterprises, Inc.
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
504/837-5880
STEWART ENTERPRISES REPORTS EARNINGS PER SHARE OF $.18
FOR THE FIRST QUARTER OF FISCAL YEAR 2000
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METAIRIE, LA, March 14, 2000 . . . Stewart Enterprises, Inc. (Nasdaq NMS:
STEI) today announced earnings of $18.8 million, or $.18 per share, for the
three months ended January 31, 2000, on revenues of $193.0 million.
William E. Rowe, President and Chief Executive Officer, stated, "We are
very pleased to report earnings per share at the upper end of the $.15-$.18
goal we discussed in our fourth quarter conference call and to report that
we have achieved the operating goals we set for the quarter. This
management team has done a good job of running our businesses, and we are
happy with the solid results produced thus far."
Funeral revenues for the first quarter of 2000 increased 15 percent to
$122.6 million compared to $106.7 million for the first quarter of 1999.
Funeral revenues from the Company's core operations increased 6 percent
with both average revenue per call and same store call volumes increasing
during the first quarter of 2000 when compared to the first quarter of
1999.
Mr. Rowe stated that funeral activity was better than expected, adding,
"Our operating and pricing strategies are designed to create long-term
customer loyalty. Families across the country have chosen our businesses
over our competitors and low-cost providers demonstrating the value to
consumers in the goodwill and name recognition of our businesses."
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Cemetery revenues for the first quarter of 2000 decreased 2 percent from
$71.4 million in the first quarter of 1999 to $70.3 million. Cemetery
revenues from the Company's core operations decreased 9 percent from the
first quarter of 1999. Cemetery gross profit decreased $6.8 million to
$14.0 million due to the decline in cemetery revenue, coupled with the high
fixed-costs of the cemetery business and the lower margins associated with
the 21 cemeteries acquired since the beginning of fiscal year 1999.
Mr. Rowe commented, "Our first quarter preneed cemetery sales were
predictably soft as our sales force is adjusting to new contract terms and
conditions that were put into place in order to improve cash flow and the
quality of our receivables. Though the impact on cemetery revenue was
anticipated, we felt this was an important step in the process of
strengthening our cash flow. At the end of the first quarter, we had cash
and marketable securities on hand of approximately $50 million, and we are
focused on maximizing cash flow as it is the lifeblood for success in the
current environment."
Brian J. Marlowe, Chief Operating Officer, added, "We are undergoing some
very positive, significant changes within the Company - changes that we
believe will provide a platform for our continuing improvement. Our new
Sales and Marketing Division will greatly enhance our sales effectiveness
through consistency in marketing programs, sales and management training,
and standardization of methods. We've taken important steps in improving
management development and accountability. Furthermore, we recently
completed our extensive, proprietary consumer research project that
provided us with excellent information about where the consumer and the
industry are headed and how to best position ourselves for the future."
Mr. Rowe added, "We plan to use our entrepreneurial culture throughout our
organization and our vision for the future to differentiate Stewart
Enterprises from its peers. It has always been our tradition to serve
families, one at a time, and to provide quality, service and value. With
this, we will continue to be a leader in the death care industry."
-more-
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FIRST QUARTER RESULTS
* Revenues of $193.0 million compared to $178.2 million in the first
quarter of 1999.
* Gross profit of $48.7 million compared to $54.2 million for the first
quarter last year.
* EBITDA of $58.6 million compared to $61.6 million for the first quarter
last year.
* Net earnings of $18.8 million or $.18 per share, compared to $23.5
million or $.24 per share, in the first quarter of 1999.
* First quarter diluted per share performance reflects an 8 percent
increase in the weighted average number of shares outstanding from 98.7
million to 106.3 million, due principally to the Company's equity
offering completed in February 1999.
* First quarter 1999 earnings and diluted earnings per share exclude the
effect of the $50.1 million after-tax ($.51 per share) cumulative
effect of the change in accounting principle recorded in fiscal year
1999.
FUNERAL RESULTS - FIRST QUARTER 2000
* Funeral revenues increased 15 percent to $122.6 million compared to
$106.7 million in the first quarter of 1999.
* Funeral revenues from the Company's core operations increased 6 percent
compared to the corresponding period in 1999.
* The Company experienced a 3.9 percent improvement in the number of
domestic funeral services performed by its core operations, coupled
with a 5.2 percent increase in the average revenue per domestic funeral
service performed by those operations.
* Of the total funerals performed in the first quarter of 2000, 19.4
percent were delivered out of the Company's backlog of preneed
funerals, as compared to 16.3 percent in the first quarter of 1999.
* Domestic cremations as a percentage of total domestic funerals
performed were 35.1 percent compared to 36.1 percent in the comparable
period of 1999.
CEMETERY RESULTS - FIRST QUARTER 2000
* Cemetery revenues for the first quarter of 2000 decreased 2 percent to
$70.3 million compared to $71.4 million in the first quarter of 1999.
* Cemetery revenues from the Company's core operations decreased 9
percent from the corresponding period of 1999, as a result of a
reduction in preneed cemetery property and merchandise sales.
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 633 funeral homes and 161 cemeteries in
North America, South America, Europe and the Pacific Rim.
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Stewart Enterprises, Inc. will host its quarterly conference call for
investors to discuss first quarter results today at 10 a.m. Central
Standard Time. The teleconference dial-in number is (800) 482-5543. From
outside the continental United States, call (303) 267-1007. Interested
parties may also listen to the live conference call via the Internet
through Stewart Enterprises' website at HTTP://WWW.STEWARTENTERPRISES.COM.
To participate, please call the number or go to the website at least 15
minutes prior to the call. A replay of the call will be available on the
Company's website until April 14, 2000. All investor information is
available at HTTP://WWW.STEWARTENTERPRISES.COM.
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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 economy, death rate,
competition and consumer preferences in the Company's domestic and foreign
markets; the Company's ability to increase prices, retain market share, and
meet preneed sales targets; financial market conditions, including stock
and bond prices and interest rates; the Company's ability to access
secondary equity and debt markets; the Company's ability to achieve
economies of scale and manage growth; the performance of acquired
businesses; the Company's success with its internal growth strategies,
operating initiatives, and cash flow initiatives; the Company's ability to
make acquisitions and enter new markets; and the effect of unanticipated
legal proceedings and unanticipated outcomes of legal proceedings. Such
factors, and others, are more fully described in Item 7 of the Company's
Form 10-K for the year ended October 31, 1999. The Company assumes no
obligation to update information contained herein.
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<TABLE>
<CAPTION>
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended January 31,
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<S> <C> <C>
2000 1999
Revenues: ------------- --------------
Funeral $ 122,646 $ 106,734
Cemetery 70,314 71,438
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Total revenues 192,960 178,172
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Costs and expenses:
Funeral 87,913 73,258
Cemetery 56,339 50,673
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Total costs and expenses 144,252 123,931
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Gross profit 48,708 54,241
Corporate general and administrative expenses 5,260 4,015
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Operating earnings 43,448 50,226
Interest expense, net (14,583) (13,806)
Other income 806 590
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Earnings before income taxes and cumulative effect
of change in accounting principle 29,671 37,010
Income taxes 10,830 13,509
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Earnings before cumulative effect of change in
accounting principle 18,841 23,501
Cumulative effect of change in accounting principle,
net of a $28,798 income tax benefit - (50,101)
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Net earnings (loss) $ 18,841 $ (26,600)
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Basic earnings per common share:
Earnings before cumulative effect of change in
accounting principle $ 0.18 $ 0.24
Cumulative effect of change in accounting principle - (0.51)
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Net earnings (loss) $ 0.18 $ (0.27)
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Diluted earnings per common share:
Earnings before cumulative effect of change in
accounting principle $ 0.18 $ 0.24
Cumulative effect of change in accounting principle - (0.51)
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Net earnings (loss) $ 0.18 $ (0.27)
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Weighted average common shares outstanding (in thousands):
Basic 106,273 98,045
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Diluted 106,273 98,721
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Dividends per common share $ 0.02 $ 0.02
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</TABLE>
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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.
March 14, 2000 /s/ KENNETH C. BUDDE
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Kenneth C. Budde
Executive Vice President
Chief Financial Officer
