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STEWART ENTERPRISES, INC. Reports Operating Results (10-Q)

June 06, 2012 | About:
10qk

10qk

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STEWART ENTERPRISES, INC. (STEI) filed Quarterly Report for the period ended 2012-04-30.

Stewart Entrp A has a market cap of $519.6 million; its shares were traded at around $6.26 with a P/E ratio of 16.6 and P/S ratio of 1. The dividend yield of Stewart Entrp A stocks is 2.7%. Stewart Entrp A had an annual average earning growth of 1.2% over the past 5 years.

Highlight of Business Operations:

Cemetery revenue improved $3.2 million, or 5.6 percent, to $59.9 million for the quarter ended April 30, 2012. This increase is primarily due to a $2.5 million, or 9.7 percent, improvement in cemetery property sales, coupled with a $0.9 million improvement in revenue related to trust activities and a $0.4 million improvement in the reserve for cancellations. We generated $72.7 million in funeral revenue during the second quarter of 2012, a $0.2 million decline from the second quarter of 2011. This decrease is primarily attributable to a 2.7 percent decline in same-store funeral services performed, which we believe compares favorably with industry-wide data in our markets. The decline in funeral services was partially offset by a 0.8 percent improvement in same-store average revenue per funeral service. In addition, we experienced a $0.7 million, or 17.6 percent, improvement in insurance commission revenue, primarily due to the increase in net preneed funeral sales. Our net preneed funeral sales increased 17.9 percent during the second quarter of 2012 compared to the second quarter of 2011. Preneed funeral sales are deferred until a future period and have no impact on current revenue.

For the first six months of fiscal year 2012, we reported net earnings of $17.3 million, earnings from continuing operations of $18.5 million, or $.21 per share, total revenue of $257.5 million and total gross profit of $54.6 million. Our earnings from continuing operations for the first six months of 2012 include a $2.5 million ($1.6 million after-tax) charge due to the organizational restructuring and a separate reduction in workforce. In addition, during the second quarter of 2012, we decided to hold one of our e-commerce businesses for sale resulting in a net loss from discontinued operations of $1.2 million. For the first six months of 2011, we reported net earnings of $18.1 million, earnings from continuing operations of $18.4 million, or $.20 per share, total revenue of $259.0 million and total gross profit of $54.0 million. Our earnings from continuing operations for the first six months of 2011 included a $1.8 million ($1.1 million after-tax) charge for the early extinguishment of debt as a result of the refinancing of our senior notes and revolving credit facility in April 2011.

Cemetery revenue improved $0.6 million, or 0.5 percent, to $112.7 million for the six months ended April 30, 2012. Cemetery property sales improved $3.3 million, or 6.9 percent compared to the first six months of 2011. In addition, we experienced a $1.8 million increase in revenue related to trust activities. These improvements were partially offset by a decline in finance charges as a result of reduced interest rates in this low interest rate environment, coupled with a $4.6 million decline in construction on various cemetery projects and in cemetery property revenue due to revenue recognition requirements for cemetery property sales. We generated $144.8 million in funeral revenue during the first six months of 2012, a $2.1 million decline from the same period of 2011. We experienced a 3.6 percent decline in same-store funeral services performed, which we believe is generally consistent with industry-wide data in our markets. The decline in funeral services was partially offset by a 1.0 percent improvement in same-store average revenue per funeral service. In addition, we experienced a $1.1 million, or 14.2 percent, improvement in insurance commission revenue, primarily due to the increase in net preneed funeral sales. Our net preneed funeral sales increased 17.5 percent during the first six months of 2012 compared to the same period of 2011. Preneed funeral sales are deferred until a future period and have no impact on current revenue.

Cash flow provided by operating activities for the first six months of fiscal year 2012 was $28.5 million compared to $35.7 million for the same period of last year. During the first six months of fiscal year 2012, we invested $11.0 million in several cemetery inventory development projects, compared to $7.7 million for the same period of last year. This spending includes a $5.2 million investment in our cremation inventory development projects during the first six months of fiscal 2012, or a $3.9 million increase over the same period of last year. In addition, we experienced a change in working capital during the first six months of fiscal year 2012, partly driven by a $5.0 million change in receivables due in part to improved preneed funeral and cemetery property sales, which are typically financed.

Our investing activities resulted in a net cash outflow of $14.5 million for the six months ended April 30, 2012, compared to a net cash outflow of $0.8 million for the comparable period in 2011. The change is primarily due to a $9.4 million net change related to purchases and sales of certificates of deposit and marketable securities. For the six months ended April 30, 2012, capital expenditures amounted to $11.9 million, which included $7.8 million for maintenance capital expenditures, $1.3 million for the construction of new funeral homes, $1.1 million related to the implementation of new business systems and $1.7 million for the purchase of land and a new building for an existing business. For the six months ended April 30, 2011, capital expenditures were $8.8 million, which included $7.2 million for maintenance capital expenditures, $1.0 million for the construction of new funeral homes and $0.6 million related to the implementation of new business systems. During the six months ended April 30, 2012, the Company purchased a funeral business resulting in a net cash outflow of $3.0 million compared to $1.8 million for the purchase of a funeral and cemetery business during the six months ended April 30, 2011.

Read the The complete Report

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