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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): January 26, 1998
EQUITY CORPORATION INTERNATIONAL
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction
of incorporation)
0-24728
(Commission file number)
75-2521142
(I.R.S. employer identification number)
415 SOUTH FIRST STREET, SUITE 210
LUFKIN, TEXAS
(Address of principal executive offices)
75901
(Zip Code)
(409) 631-8700
(Registrant's telephone number, including area code)
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Item 5. Other Information.
On January 26, 1998, the Company issued a press release reporting preliminary
fourth quarter earnings and revised expectations for 1998. This press release,
which is filed as Exhibit 99.1 hereto, is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
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99.1 Press Release, dated January 26, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this current report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: February 11, 1998
EQUITY CORPORATION INTERNATIONAL
By: /s/ W. Cardon Gerner
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Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT INDEX DESCRIPTION
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99.1 Press Release, dated January 26, 1998.
EXHIBIT 99.1
NEWS RELEASE
EQUITY CORPORATION INTERNATIONAL
P.O. Drawer 100, Lufkin, Texas 75902-0100
CONTACT: W. Cardon Gerner, (409) 631-8703
FOR IMMEDIATE RELEASE:
EQUITY CORPORATION INTERNATIONAL REPORTS PRELIMINARY
FOURTH QUARTER EARNINGS AND REVISED EXPECTATIONS FOR 1998
Continues to Expect Record Results
LUFKIN, TX., Jan. 26, 1998 -- Equity Corporation International
(NYSE:EQU), the nation's fourth largest death care company, announced
today that it expects earnings per share for the fourth quarter ended
December 31, 1997 to be 19 cents per share versus 17 cents for the same
period last year, and one cent below analysts' consensus estimate. The
one-cent shortfall relative to expectations is attributed to soft
mortality, which affected both the funeral and cemetery segments, and
select cemetery properties acquired later in the year which experienced
moderate delays in realizing targeted financial results. The 17 cents
reported for the December 1996 quarter includes approximately 2 cents
attributable to non-recurring gains. The company anticipates reporting
record revenue and earnings for the fourth quarter and for the full year
of 1997 and the expected results represent an increase of 26.7% quarter
over quarter on a comparable basis. Final quarterly and year end results
are expected to be released on or about March 5, 1998.
James P. Hunter, III, chairman and chief executive officer, commented,
"Our 1997 acquisition campaign was record setting, resulting in spending
of approximately $150 million, up significantly from our original
estimate of $65 million. We acquired premier funeral and cemetery
operations, which include both strategic locations and add-ons to
existing locales. Moreover, many of the acquired properties are larger
than ECI's typical operations. We fully anticipate continued
acquisition momentum in 1998 and have budgeted spending in the range of
$150-$160 million. First quarter closings are anticipated to be in the
range of $60-$70 million.
"With respect to our outlook on 1998 operating performance, we have
comprehensively reviewed our core and newly acquired properties, to
include the additional infrastructure needs of a fast-growing company.
And, very importantly, the general environment of the death care
industry was taken into account in developing our current year plan. We
believe that 1997 mortality trends were, in fact, an aberration.
However, we cannot with accuracy predict when they will normalize and,
accordingly, we deem the prudent course to be somewhat conservative in
our 1998 outlook. Additionally, a significant percentage of our total
revenue will be derived from firms acquired within the last 24 months
which are in the earlier stages of the maturation cycle, further
supporting our conservative positioning.
"Since the company's inception, we have been committed to the long-term
success of our operating businesses and retention of consumer loyalty;
thus, we have been reluctant to implement short-sighted strategies that
may result in market share losses. Specifically, excessive pricing and
cost containment may yield immediate results at the expense of long-term
stability.
"Based on these factors, we expect 1998 earnings per share to be in a
range of 85 to 90 cents compared to current analysts' consensus estimate
of 90 cents. The revised range falls within our corporate strategic
objective of achieving average annual earnings per share increases of
25-30 percent," Hunter concluded.
Certain matters discussed in this release are forward-looking statements
that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and
uncertainties include, but are not limited to the following: the company
maintaining its high level of acquisition activity and achieving
expected performance from these acquired businesses, and the ability to
manage internal growth of existing operations; the economy, competition
and death rates in the company's geographic areas of operation; and
sufficient availability of capital resources to fund future acquisitions
and planned levels of capital expenditures which will depend on
prevailing market conditions, interest rates, and the financial
condition of the company.
