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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): JUNE 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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ITEM 5. OTHER EVENTS
On June 6, 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 ACHIEVES EARNINGS PER SHARE AND CASH FLOW
EXPECTATIONS FOR THE SECOND QUARTER OF FISCAL YEAR 2000
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METAIRIE, LA, June 6, 2000 . . . Stewart Enterprises, Inc. (Nasdaq NMS:
STEI) today announced net earnings of $19.3 million, or $.18 per share, on
revenues of $188.9 million for the three months ended April 30, 2000. For
the six months ended April 30, 2000, the Company announced net earnings of
$38.2 million, or $.36 per share, on revenues of $381.8 million. For the
six months ended April 30, 2000, cash flow from operations increased to $38
million, an increase of $36 million from the first six months of 1999.
William E. Rowe, President and Chief Executive Officer, stated, "At the
close of fiscal year 1999, we articulated a plan for fiscal year 2000, our
rebuilding year, and through the first two quarters we have met or exceeded
consensus expectations. We remain committed to growth through internal
strategies and improved cash flow. We are working hard at building our cash
reserves, and to that end, we have empowered people at every level of our
organization to focus on improving our cash flow. As of April 30, 2000, we
had over $100 million in cash and marketable securities on hand."
Funeral revenues for the second quarter of 2000 increased 2 percent to
$115.8 million compared to $113.2 million for the second quarter of 1999.
The average revenue per call from the Company's core operations increased
during the quarter. Funeral volumes were down, as expected, as first
quarter funeral volumes were unusually high and were expected to level out
during the remainder of the year.
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Cemetery revenues for the second quarter of 2000 decreased 10 percent to
$73.1 million due principally to a decline in preneed cemetery sales.
Brian J. Marlowe, Chief Operating Officer, commented, "Our preneed sales in
the quarter were soft, although improved from the first quarter of 2000 and
in line with expectations. We have made some changes in the terms and
conditions of our preneed sales contracts that will improve the long-term
quality of our receivables and cash flow but have impacted our short-term
sales. We feel there is opportunity for improvement in our preneed sales
through the efforts of our Sales and Marketing Division, which was just
created at the onset of the quarter."
Mr. Rowe stated, "We are pleased to have met our goals in the first two
quarters, and we plan to continue to build our cash reserves with
successful execution of solid operating and financial strategies. As a
result of our fiscal year 2000 initiatives, we have made steady
improvements in cash flow and operating results."
SECOND QUARTER RESULTS
* Revenues of $188.9 million compared to $194.3 million in the second
quarter of 1999.
* Gross profit of $49.8 million compared to $57.7 million for the
second quarter last year.
* EBITDA of $58.4 million compared to $66.1 million for the second
quarter last year.
* Net earnings of $19.3 million or $.18 per share, compared to $27.1
million or $.24 per share in the second quarter of 1999.
YEAR TO DATE RESULTS
* Revenues of $381.8 million compared to $372.5 million in the first
six months of 1999.
* Gross profit of $98.5 million compared to $111.9 million for the first
six months last year.
* EBITDA of $117.1 million compared to $127.7 million for the first six
months last year.
* Net earnings of $38.2 million or $.36 per share, compared to $50.6
million or $.48 per share in the first six months of 1999.
* Year to date 1999 earnings and diluted earnings per share exclude the
effect of the $50.1 million after-tax ($.48 per share) cumulative effect
of the change in accounting principle recorded in fiscal year 1999.
FUNERAL RESULTS - SECOND QUARTER 2000
* Funeral revenues increased 2 percent to $115.8 million compared to
$113.2 million in the second quarter of 1999.
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* Funeral revenues from the Company's core operations decreased 4
percent compared to the corresponding period in 1999 due primarily to a
decline in preneed funeral merchandise sales.
* In addition, the Company experienced a 7.5 percent increase in the
average revenue per domestic funeral service performed by its core
operations, partially offset by a 6 percent decrease in the number of
domestic funeral services performed by those operations.
* Of the total funerals performed in the second quarters of 2000 and
1999, 19.5 percent were delivered out of the Company's backlog of
preneed funerals.
* Domestic cremations as a percentage of total domestic funerals
performed were 35.6 percent compared to 36.5 percent in the comparable
period of 1999.
FUNERAL RESULTS - YEAR TO DATE
* Funeral revenues increased 8 percent to $238.4 million compared to
$219.9 million in the first six months of 1999.
* Funeral revenues from the Company's core operations increased 1
percent compared to the corresponding period in 1999.
* The Company experienced a 6.4 percent increase in the average revenue
per domestic funeral service performed by its core operations, partially
offset by a 1.3 percent decrease in the number of domestic funeral
services performed by those operations.
* Of the total funerals performed in the first six months of 2000, 19.4
percent were delivered out of the Company's backlog of preneed funerals,
as compared to 17.9 percent in the first six months of 1999.
* Domestic cremations as a percentage of total domestic funerals
performed were 35.2 percent compared to 36.0 percent in the comparable
period of 1999.
CEMETERY RESULTS - SECOND QUARTER 2000
* Cemetery revenues for the second quarter of 2000 decreased 10 percent
to $73.1 million compared to $81.1 million in the second quarter of
1999.
* Cemetery revenues from the Company's core operations decreased 17
percent from the corresponding period of 1999, as a result of a
reduction in preneed cemetery property and merchandise sales.
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CEMETERY RESULTS - YEAR TO DATE
* Cemetery revenues for the first six months of 2000 decreased 6
percent to $143.4 million compared to $152.5 million in the first six
months of 1999.
* Cemetery revenues from the Company's core operations decreased 13
percent from the corresponding period of 1999, as a result of a
reduction in preneed cemetery property and merchandise sales.
Stewart Enterprises, together with other members of the industry, is
currently discussing directly with the staff of the Securities and Exchange
Commission the application of its recently issued Staff Accounting Bulletin
No. 101 - "Revenue Recognition in Financial Statements." Based on
currently available information, the Company believes that final resolution
of these discussions may have a material impact on the Company's reported
consolidated earnings and financial condition and on the manner in which
certain preneed sales activities are recorded by the Company and the
industry, although the Company does not believe that the final resolution
will have a material impact on the Company's consolidated cash flows. The
Company has not reached a final resolution of these discussions but
anticipates these discussions to be finalized by the end of its third
fiscal quarter of 2000. The Company is not required to implement the new
accounting guidance until the first fiscal quarter of 2001.
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 628 funeral homes and 162 cemeteries in
North America, South America, Europe and the Pacific Rim.
Stewart Enterprises, Inc. will host its quarterly conference call for
investors to discuss second quarter results today at 10 a.m. Central
Standard Time. The teleconference dial-in number is (877) 282-0743. From
outside the continental United States, call (703) 871-3073. 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 July 6, 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; THE EFFECT OF UNANTICIPATED LEGAL
PROCEEDINGS AND UNANTICIPATED OUTCOMES OF LEGAL PROCEEDINGS; AND CHANGES IN
ACCOUNTING POLICIES AND PRACTICES ADOPTED VOLUNTARILY OR REQUIRED TO BE
ADOPTED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. SUCH FACTORS, AND
OTHERS, ARE MORE FULLY DESCRIBED IN ITEM 5 OF THE COMPANY'S FORM 10-Q FOR
THE QUARTER ENDED JANUARY 31, 2000. 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 April 30,
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2000 1999
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<S> <C> <C>
Revenues:
Funeral $ 115,741 $ 113,198
Cemetery 73,120 81,099
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Total revenues 188,861 194,297
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Costs and expenses:
Funeral 84,936 80,114
Cemetery 54,141 56,515
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Total costs and expenses 139,077 136,629
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Gross profit 49,784 57,668
Corporate general and administrative expenses 4,883 4,333
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Operating earnings 44,901 53,335
Interest expense, net (14,447) (11,688)
Other income (expense) (10) 1,043
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Earnings before income taxes 30,444 42,690
Income taxes 11,112 15,582
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Net earnings $ 19,332 $ 27,108
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Earnings per common share:
Basic $ 0.18 $ 0.24
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Diluted $ 0.18 $ 0.24
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Weighted average common shares outstanding (in thousands):
Basic 106,557 111,707
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Diluted 106,596 112,192
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Dividends per common share $ 0.02 $ 0.02
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</TABLE>
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<TABLE>
<CAPTION>
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
Six Months Ended April 30,
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2000 1999
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<S> <C> <C>
Revenues:
Funeral $ 238,387 $ 219,932
Cemetery 143,434 152,537
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Total revenues 381,821 372,469
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Costs and expenses:
Funeral 172,849 153,372
Cemetery 110,480 107,188
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Total costs and expenses 283,329 260,560
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Gross profit 98,492 111,909
Corporate general and administrative expenses 10,143 8,348
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Operating earnings 88,349 103,561
Interest expense, net (29,030) (25,494)
Other income 796 1,633
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Earnings before income taxes and cumulative effect
of change in accounting principle 60,115 79,700
Income taxes 21,942 29,091
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Earnings before cumulative effect of change in
accounting principle 38,173 50,609
Cumulative effect of change in accounting principle,
net of a $28,798 income tax benefit - (50,101)
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Net earnings $ 38,173 $ 508
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Basic earnings per common share:
Earnings before cumulative effect of change in
accounting principle $ 0.36 $ 0.48
Cumulative effect of change in accounting principle - (0.48)
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Net earnings $ 0.36 $ 0.00
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Diluted earnings per common share:
Earnings before cumulative effect of change in
accounting principle $ 0.36 $ 0.48
Cumulative effect of change in accounting principle - (0.48)
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Net earnings $ 0.36 $ 0.00
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Weighted average common shares outstanding (in thousands):
Basic 106,414 104,687
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Diluted 106,432 105,286
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Dividends per common share $ 0.04 $ 0.04
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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.
June 6, 2000 /s/KENNETH C. BUDDE
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Kenneth C. Budde
Executive Vice President
Chief Financial Officer
