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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): November 18, 1999
Service Corporation International
(Exact name of Registrant as specified in its Charter)
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<S> <C> <C>
Texas 1-6402-1 74-1488375
(State or Other Jurisdiction (Commission (IRS Employer)
of Incorporation) File Number) Identification No.)
1929 Allen Parkway
Houston, Texas 77019
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (713) 522-5141
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Item 5. Other Events.
On November 18, 1999, Service Corporation International, a Texas
corporation (the "Company"), announced that George R. Champagne, Executive Vice
President and Chief Financial Officer, is leaving the Company as more fully
described in the press release filed as Exhibit 99.1 to this Current Report on
Form 8-K.
On November 23, 1999, the Company announced (i) the formation of a
special committee of the Company's Board of Directors to expedite cost
reduction, cash flow enhancement and debt reduction initiatives, and
(ii) certain factors that may adversely impact results for 2000. The foregoing
is more fully described in the press release filed as Exhibit 99.2 to this
Current Report on Form 8-K.
Item 7. Exhibits.
(c) Exhibits.
99.1 Press release dated November 18, 1999 issued by the Company.
99.2 Press release dated November 23, 1999 issued by the Company.
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SIGNATURES
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 hereunto duly authorized.
SERVICE CORPORATION INTERNATIONAL
Date: November 23, 1999 By: /s/ JAMES M. SHELGER
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James M. Shelger
Senior Vice President,
General Counsel
and Secretary
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INDEX TO EXHIBITS
99.1 Press release dated November 18, 1999 issued by the Company
99.2 Press release dated November 23, 1999 issued by the Company
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EXHIBIT 99.1
[SCI NEWS LETTERHEAD]
FOR IMMEDIATE RELEASE;
SERVICE CORPORATION INTERNATIONAL
ANNOUNCES MANAGEMENT CHANGE
HOUSTON, TEXAS, NOVEMBER 18, 1999 . . . Service Corporation International (NYSE:
SRV), the world's largest funeral and cemetery company, announced today that
George R. Champagne, the Company's Chief Financial Officer, is leaving the
Company. Mr. Champagne will remain associated with the Company in a consulting
capacity. The Company also announced that Todd A. Matherne, the Company's Senior
Vice President and Treasurer, has been appointed the Company's Chief Financial
Officer on an interim basis.
As of September 30, 1999, SCI affiliates operated 3,823 funeral service
locations, 524 cemeteries and 198 crematoria. SCI provides funeral and cemetery
services in 20 countries on five continents.
For additional information contact:
SCI: Debbie E. Fisher -- Director/Investor Relations Tel: (713) 525-9088
Eric D. Tanzberger -- Assistant Controller/
Investor Relations Tel: (713) 525-7768
W. Cardon Gerner -- Vice President/Controller Tel: (713) 525-9121
Other Service Corporation International and press releases are available through
Company News On-Call by fax, (800) 758-5804, extension 104532, or at
http://www.prnewswire.com or SCI's homepage: http://www.sci-corp.com.
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EXHIBIT 99.2
[SCI NEWS LETTERHEAD]
FOR IMMEDIATE RELEASE:
SERVICE CORPORATION INTERNATIONAL
FORMS SPECIAL COMMITTEE OF THE BOARD AND ANNOUNCES
FACTORS IMPACTING OUTLOOK FOR 2000
HOUSTON, TEXAS, November 23, 1999 . . . Service Corporation International (NYSE:
SRV), the world's largest funeral and cemetery company, announced today its
Board of Directors has formed a Special Committee of the Board to expedite the
Company's cost reduction, cash flow enhancement and debt reduction initiatives.
The Committee is chaired by an outside director, Mr. B. D. Hunter, and includes
two additional outside directors and one inside director. As a result of this
increased focus, the Company expects to identify additional cost reduction
initiatives and other items that will result in charges to earnings during the
fourth quarter of 1999. Details of the fourth quarter charges and expected
benefits will be announced when quantified and approved by the Committee.
The Company is in the process of completing its internal budgets and outlook for
2000 and while not yet completed, believes that the following items, among
others, may adversely impact results for 2000:
o Cemetery trust gains, primarily related to equity portfolios, are not
expected to occur at the levels realized historically. The Company
currently anticipates that the realized gains and income from the cemetery
trust funds will approximate $45 to $50 million in 2000 compared to 1999
projected levels of approximately $70 million.
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o Gains on the sales of businesses are not expected to occur in 2000 at the
levels experienced previously due to current market conditions. Net gains
through the third quarter of 1999 were approximately $16 million.
o The Company routinely sells undeveloped cemetery property when
strategically and economically prudent. The Company expects operating
earnings in 2000 to be adversely impacted by approximately $10 million
versus 1999 levels related to such sales of undeveloped cemetery property.
o The Company expects interest expense to increase by approximately $30
million in 2000, as a result of increased borrowing costs related to its
reduced credit rating.
The Company will complete its 2000 budget process over the next several weeks
and continues to assess the potential impact of its previously announced
strategic revenue, marketing and cash flow initiatives on its funeral and
cemetery segments for 2000.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
The statements contained in this press release that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements may be accompanied by words such
as "believe," "estimate," "project," "expect," "anticipate," or "predict," that
conveys the uncertainty of future events or outcomes. These statements are based
on assumptions that the Company believes are reasonable; however, many important
factors could cause the Company's actual results in the future to differ
materially from the forward-looking statements made herein and in any other
documents or oral presentations made by, or on behalf of, the Company. Important
factors, which could cause actual results to differ materially from those in
forward-looking statements, include, among others, the following:
1) Changes in general economic conditions both domestically and
internationally impacting financial markets (e.g. marketable security
values, as well as currency and interest rate fluctuations) that could
negatively affect the Company, especially the Company's anticipated
cemetery trust revenues.
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2) Changes in domestic and international political and/or regulatory
environments in which the Company operates, including tax and accounting
policies. Changes in regulations may impact the Company's ability to expand
markets or remain in current markets.
3) Changes in consumer demand and/or pricing for the Company's products and
services caused by several factors, such as changes in local death rates,
cremation rates, competitive pressures and local economic conditions.
4) Changes in the Company's public credit rating impacting the Company's cost
of financing.
5) The Company's ability to sell preneed heritage cemetery property which is
usually associated with new customers to the Company's cemeteries.
6) The Company's ability to successfully integrate acquisitions into the
Company's business and to realize expected cost savings in connection with
such acquisitions.
7) The Company's ability to successfully implement certain previously
announced and future cost reduction initiatives, as well as changes in
domestic and international political and/or regulatory environments which
could negatively effect the implementation of the Company's cost
initiatives.
8) The Company's ability to successfully implement certain strategic revenue,
marketing and cash flow initiatives which could result in increased volume
through its existing facilities and could improve or generate cash flow for
the Company.
9) The Company's ability to successfully leverage its substantial purchasing
power with certain of the Company's vendors.
10) The ability of the Company, or its critical third party suppliers, to
adequately complete "Y2K" preparation efforts. "Y2K" refers to the
inability of some computer programs and computer-based microprocessors to
correctly interpret the century from a date in which the year is
represented by only two digits.
The Company assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking statements
made by the Company.
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As of September 30, 1999, SCI affiliates operated 3,823 funeral service
locations, 524 cemeteries and 198 crematoria. SCI provides funeral and cemetery
services in 20 countries on five continents.
For additional information contact:
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SCI: Debbie E. Fisher - Director / Investor Relations Tel: (713) 525-9088
Eric D. Tanzberger - Assistant Controller / Investor Relations Tel: (713) 525-7768
W. Cardon Gerner - Vice President / Controller Tel: (713) 525-9121
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Other Service Corporation International and press releases are available through
Company News On-Call by fax, (800) 758-5804, extension 104532, or at
http://www.prnewswire.com or SCI's homepage: http://www.sci-corp.com.
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