Stewart Enterprises (STEI) Company Press Release:
Stewart Enterprises Reports Fourth Quarter and Year-end Results
Fiscal Year 1997 Earnings Increase 39%, Earnings Per Share Increase 30%
METAIRIE, La.--(BUSINESS WIRE)--Dec. 17, 1997--Stewart Enterprises, Inc. (Nasdaq/NMS:STEI - news)today announced fiscal year 1997 results, highlighted by a 39% increase in earnings, to $69.7 million, and a 30% increase in earnings per share to $1.57, before the cumulative effect of changes in accounting principles reported earlier this year, compared to fiscal year 1996 net earnings and earnings per share of $50.0 million and $1.21, respectively, presented on a pro forma basis
to reflect the changes in accounting methods. The cumulative effect of the changes in accounting principles resulted in a $2.3 million, or $.05 per share, charge to earnings for the fiscal year ended October 31, 1997. Revenues increased 23%, to $532.6 million from $432.3 million on a pro forma basis for fiscal year 1996.
Excluding the effect of the accounting changes, net earnings for the year increased 29% to $66.4 million, and earnings per share increased 21%, to $1.50, from the $51.3 million and $1.24, respectively, previously reported for fiscal year 1996.
Fiscal year 1997 per-share performance reflects a 7% increase in the weighted average number of shares outstanding, from 41.4 million to 44.4 million, due principally to the Company's equity offering completed in June 1997.
For the current quarter, net earnings increased 59% to $18.4 million, and earnings per share increased 36% to $.38, from $11.6 million and $.28, respectively, presented on a pro forma basis for the corresponding period in fiscal year 1996. For the same period, revenues increased 28%, to $142.2 million from $111.1 million on a pro forma basis for the comparable period
last fiscal year.
Excluding the effect of the accounting changes, net earnings for the current quarter increased 38% to $17.3 million, and earnings per share increased 20%, to $.36, from the $12.5 million and $.30, respectively, previously reported for the fourth quarter of fiscal year 1996.
Fourth quarter per-share performance reflects a 17% increase in the weighted average number of shares outstanding, from 41.7 million to 48.6 million, due principally to the Company's recent equity offering.
Fiscal Year 1997 Marked by Record-breaking Financial Performance and Other Milestones
Joseph P. Henican, III, Chief Executive Officer, commented, ''Fiscal year 1997 has been a very exciting year for Stewart Enterprises. We posted a 30% increase in EPS growth over fiscal year 1996 levels. Our revenues exceeded half a billion dollars, nearly triple the amount recognized just five years ago. As of October 31, 1997, our stock price appreciated more than 21% since the end of fiscal year 1996, and our total market capitalization exceeded $2.5 billion.''
Mr. Henican continued, ''We completed our first public debt offering, issuing $100 million of 7-year notes at attractive rates with investment grade ratings, we increased our revolving credit facility to $600 million, and we completed our fifth, and largest, equity offering, generating nearly $211 million in net proceeds. In each of these transactions, we were favorably received by the financial community. Later in the year, we were selected for inclusion in the S&P MidCap 400 and Nasdaq-100 Indices, two key barometers of stock market activity.''
''The common thread that ties all of these events together is the dedication and commitment of every employee of Stewart Enterprises. It is only through the coordinated efforts of these 9,000 individuals that results like these have been possible, and it is this team that will lead Stewart Enterprises into the next millennium.''
Margins Expand Nearly 300 Basis Points; 114 New Businesses Added for $185 Million
William E. Rowe, President and Chief Operating Officer, stated, ''Once again, we are pleased to report another fine financial performance, highlighted by significant gross and operating margin expansion. Including the effects of our recent accounting changes, our gross margin for the current fiscal year expanded 270 basis points, to 29.5%, and our operating margin increased 310 basis points to 26.6%, from 26.8% and 23.5%, respectively, on a pro forma basis for fiscal year 1996. This performance reflects our continued focus on improving the performance of our core businesses and the maturation of recent acquisitions, including our strategy of controlling costs by negotiating favorable contracts with major suppliers.''
Mr. Rowe commented further, ''During fiscal year 1997, we acquired 114 businesses for an aggregate purchase price of approximately $185 million, and we entered the states of New Mexico, Oklahoma and Washington in the United States. During the fiscal year, we also entered the continent of Europe, with the acquisition of 18 funeral homes in Spain and Portugal.
Domestically, we have added another 38 properties to our West Coast operations, including the acquisition in March of this year of the Sentinel Cremation Societies, a premier alternative services firm. We expanded our presence in Australia and New Zealand with 19 new businesses there, and we enhanced our existing clusters in Florida with 14 new businesses there. Earlier this year, we announced the expansion of our Corporate Development team with the addition of seasoned industry professionals to assist in our domestic expansion and to create a corporate development team in Europe.''
''During fiscal year 1997, we were especially pleased to have been selected by the Archdiocese of Los Angeles to build funeral homes on six of their cemeteries. This alliance will enable us to assist the Archdiocese in serving the Catholic community, and it provides us with an innovative internal growth strategy.''
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 406 funeral homes and 130 cemeteries in North America, Europe and the Pacific Rim.
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 Company's ability to sustain recent levels of acquisition activity and enter new markets; the economy, death rate and competition in the Company's markets; financial market conditions, including stock and bond prices and interest rates; the Company's ability to achieve economies of scale and manage growth; and the performance of acquired businesses. Such factors, and others, are more fully described in Item 5 of the Company's Form 10-Q for the quarter ended July 31, 1997. The Company assumes no obligation to update information contained herein.
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
Three Months Ended October 31,
1997 1996 1996
Revenues: (Pro Forma)(1) (As Reported)
Funeral $ 80,110 $ 58,897 $ 60,487
Cemetery 62,096 52,237 52,786
Total revenues 142,206 111,134 113,273
Costs and expenses:
Funeral 56,080 41,612 41,612
Cemetery 44,617 41,145 41,588
Total costs and expenses 100,697 82,757 83,200
Gross profit 41,509 28,377 30,073
Corporate general and administrative
expenses 4,943 4,947 4,947
Operating earnings 36,566 23,430 25,126
Interest expense (8,866) (7,471) (7,471)
Investment and other income 416 2,300 2,300
Earnings before income taxes 28,116 18,259 19,955
Income taxes 9,700 6,662 7,483
Net earnings 18,416 $ 11,597 $ 12,472
Earnings per common share $ 0.38 $ 0.28 $ 0.30
Weighted average common shares
outstanding (in thousands) 48,644 41,694 41,694
Dividends per common share $ 0.02 $ 0.02
(1) Reflects changes in the Company's accounting methods, effective
November 1, 1996
STEWART ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
Year Ended October 31,
1997 1996 1996
Revenues: (Pro Forma)(1) (As Reported)
Funeral $291,649 $219,134 $225,461
Cemetery 240,937 213,120 207,926
Total revenues 532,586 432,254 433,387
Costs and expenses:
Funeral 202,414 153,222 153,222
Cemetery 173,000 163,351 162,047
Total costs and expenses 375,414 316,573 315,269
Gross profit 157,172 115,681 118,118
Corporate general and
administrative expenses 15,402 14,096 14,096
Operating earnings 141,770 101,585 104,022
Interest expense (38,031) (26,051) (26,051)
Investment and other income 2,738 4,104 4,104
Earnings before income taxes
and cumulative effect
of change in accounting
principles 106,477 79,638 82,075
Income taxes 36,735 29,679 30,778
Earnings before cumulative
effect of change in accounting
principles 69,742 49,959 51,297
Cumulative effect of change in
accounting principles, net of
a $2,230 income tax benefit (2,324) - -
Net earnings $ 67,418 $ 49,959 $ 51,297
Earnings per common share:
Earnings before cumulative
effect of change in accounting
principles $ 1.57 $ 1.21 $ 1.24
Cumulative effect of change in
accounting principles (0.05) - -
Net earnings $ 1.52 $ 1.21 $ 1.24
Weighted average common shares
outstanding (in thousands) 44,389 41,410 41,410
Dividends per common share $ 0.08 $ 0.066
(1) Reflects changes in the Company's accounting methods,
effective November 1, 1996
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Contact:
Stewart Enterprises, Inc.
Ronald H. Patron, 504/837-5880 |
