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Service Corp. International Reports Operating Results (10-Q)

July 30, 2010 | About:
10qk

10qk

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Service Corp. International (SCI) filed Quarterly Report for the period ended 2010-06-30.

Service Corp. International has a market cap of $2.15 billion; its shares were traded at around $8.45 with a P/E ratio of 16.2 and P/S ratio of 1.1. The dividend yield of Service Corp. International stocks is 1.8%. Service Corp. International had an annual average earning growth of 4.1% over the past 10 years.SCI is in the portfolios of Mason Hawkins of Southeastern Asset Management, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Pioneer Investments, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Our financial position is enhanced by our $6.5 billion backlog of future revenues from both trust and insurance-funded sales at June 30, 2010, which is the result of preneed funeral and cemetery sales. We believe we have the financial strength and flexibility to reward shareholders through dividends while maintaining a prudent capital structure and pursuing new opportunities for profitable growth. We currently have approximately $51.1 million authorized to repurchase our common stock.

On March 26, 2010, pursuant to a tender offer, we acquired approximately 91% of the outstanding common stock of Keystone for C$8.07 per share in cash, resulting in a purchase price of $288.9 million, which included the refinancing of $80.7 million of Keystones debt and our purchase of the remaining shares of Keystone for $17.5 million, which was completed during the second quarter of 2010 using available cash balance.

As a result of the acquisition of Keystone in March 2010, we incurred $150 million of new debt and we also refinanced debt of approximately $81 million, which was settled in cash concurrent with the acquisition closing. We do not believe this additional acquisition related debt of $150 million added meaningfully to our long term debt obligations as the debt purchases in 2009 of $91 million were completed partly in anticipation of this new debt.

Investing Activities Net cash used in investing activities increased $209.3 million in the first half of 2010 compared to the first half of 2009, primarily due to an increased outflow of $281.6 million in acquisitions, partially offset by increased inflows of $26.3 million in withdrawals of restricted funds and $45.1 million in proceeds from divestitures.

Financing Activities Net cash used in financing activities decreased by $166.6 million in the first half of 2010 compared to the first half of 2009, primarily due to a $168.8 million increase in proceeds from issuance of long-term debt (net of debt issuance costs) and a $47.5 million decrease in debt payments which was partially offset by $55.2 million in purchases of company stock.

When selling preneed funeral and cemetery contracts, we may post surety bonds where allowed by state law. We post the surety bonds in lieu of trusting a certain amount of funds received from the customer. The amount of the bond posted is generally determined by the total amount of the preneed contract that would otherwise be required to be trusted, in accordance with applicable state law. For the three months ended June 30, 2010 and 2009, we had $4.9 million and $6.3 million, respectively, of cash receipts attributable to bonded sales. For the six months ended June 30, 2010 and 2009, we had $9.9 million and $12.6 million, respectively, of cash receipts attributable to bonded sales. These amounts do not consider reductions associated with taxes, obtaining costs, or other costs.

Read the The complete Report

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10qk
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