StoneMor Partners L.P. (NYSE:STON) issued a statement today in
response to recent market activity in its unit price.
CEO Larry Miller stated, "Normally, it is not the policy of
StoneMor to respond to price action of our units. We feel an
obligation to our unit holders to provide some information that
adds insight into our business.
"StoneMor Partners, since becoming a publicly traded MLP, has
acquired cemetery and funeral assets of more than $220 million.
Because MLPs pay out most of their cash flow to unit holders,
StoneMor, like every other MLP, finances these acquisitions with
debt and periodic equity offerings. The table below highlights the
sources of debt and equity capital obtained since 2007 and the use
of this acquired capital.
|
For the years
ended December 31, |
|
2007 |
2008 |
2009 |
2010 |
2011 |
(in thousands) |
|
|
|
|
|
Capital Sources |
|
|
|
|
|
Borrowings* |
$ 73,713 |
$ 33,188 |
$ 246,788 |
$ 74,727 |
$ 46,573 |
Equity
raised |
50,788 |
500 |
24,189 |
45,714 |
105,733 |
|
|
|
|
|
|
Capital Acquired |
$ 124,501 |
$ 33,688 |
$ 270,977 |
$ 120,441 |
$ 152,306 |
|
|
|
|
|
|
Capital Uses |
|
|
|
|
|
Debt
repayments |
$ 34,000 |
$ 18,446 |
$ 239,862 |
$ 41,712 |
$ 75,184 |
Growth in accounts
receivable |
2,430 |
6,678 |
9,770 |
15,357 |
9,241 |
Growth in merchandise
trust |
5,223 |
453 |
6,133 |
13,517 |
23,889 |
Assets
acquired |
86,777 |
17,046 |
12,180 |
49,551 |
29,186 |
|
|
|
|
|
|
Total Uses |
$ 128,430 |
$ 42,623 |
$ 267,945 |
$ 120,137 |
$ 137,500 |
|
|
|
|
|
|
*Borrowings listed net of debt
issuance costs. |
"By following this formula, the company has effectively
increased the size of its asset base while not significantly
increasing its debt load which has allowed it to remain flexible
and opportunistic in the acquisition market.
"As the table below exhibits, we have grown the company
significantly without increasing the total debt.
A graph comparing total assets to total debt is available at
https://media.globenewswire.com/cache/11738/file/14750.pdf.
"By continuing to grow, the company has built up a net asset
base that will continue to provide for liquidity well into the
future.
|
March 31, 2012 |
|
(in thousands) |
|
|
Cash and Accounts Receivable,
net |
$ 126,782 |
Merchandise Trust |
355,027 |
|
|
Total Cash and Investments to Satisfy
Liabilities |
481,809 |
|
|
Accounts Payable and Accrued
Liabilities |
22,332 |
Cemetery Merchandise
Liability |
128,220 |
|
|
Payables and Merchandise
liabilities |
150,552 |
|
|
Net cash after satisfaction of
liabilities |
$ 331,257 |
|
|
Debt outstanding |
203,126 |
|
|
Net cash after satisfaction of
debt |
$ 128,131 |
"Were StoneMor to satisfy all of its liabilities as of March 31,
2012, the company would still have more than $128 million in cash,
12,800 acres in cemetery land, perpetual care trusts with a value
in excess of $250 million and 272 cemeteries and 76 funeral
homes.
"The company provides information on a production basis in order
to allow the investor to understand the current sales activity and
operating performance of the company. The following table
illustrates the effect that growth has had on the recognition of
revenues. In 2005, shortly after the company first went public and
prior to the time that it began to experience growth, there was
virtually no difference between GAAP and production based
revenues.
A graph illustrating revenue is available at
https://media.globenewswire.com/cache/11738/file/14750.pdf.
"Our business model provides a high level of predictability and
stability. We have grown profitably even in challenging
environments. The demographics of our industry provide us with a
great deal of visibility into our future. There are very high
barriers to entry to our business and the fragmented nature of the
industry is also favorable to our model. We believe that we are
ideally positioned to carry on our growth strategy and bring value
to our unitholders. As previously announced, we will be paying our
32nd consecutive distribution, in the amount of 58.5 cents per
unit, to unitholders on August 15th and will announce our second
quarter earnings on August 7th, 2012," concluded Miller.
About StoneMor Partners L.P.
StoneMor Partners L.P., headquartered in Levittown,
Pennsylvania, is an owner and operator of cemeteries and funeral
homes in the United States, with 272 cemeteries and 76 funeral
homes in 28 states and Puerto Rico. StoneMor is the only publicly
traded death care company structured as a partnership. StoneMor's
cemetery products and services, which are sold on both a pre-need
(before death) and at-need (at death) basis, include: burial lots,
lawn and mausoleum crypts, burial vaults, caskets, memorials, and
all services which provide for the installation of this
merchandise.
For additional information about StoneMor Partners L.P., please
visit StoneMor's website, and the Investor Relations section, at
http://www.stonemor.com.
Forward-Looking Statements
Certain statements contained in this press release, including,
but not limited to, information regarding the status and progress
of the StoneMor's operating activities, the plans and objectives of
StoneMor's management, assumptions regarding StoneMor's future
performance and plans, and any financial guidance provided, as well
as certain information in other filings with the SEC and elsewhere,
are forward-looking statements within the meaning of Section 27A(i)
of the Securities Act of 1933 and Section 21E(i) of the Securities
Exchange Act of 1934. The words "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "project,"
"expect," "predict," and similar expressions identify these
forward-looking statements. These forward-looking statements are
made subject to certain risks and uncertainties that could cause
actual results to differ materially from those stated, including,
but not limited to, the following: uncertainties associated with
the integration or the anticipated benefits of StoneMor's recent
acquisitions; uncertainties associated with future revenue and
revenue growth; the effect of the current economic downturn; the
impact of StoneMor's significant leverage on its operating plans;
the ability of StoneMor to service its debt and pay distributions;
the decline in the fair value of certain equity and debt securities
held in StoneMor's trusts; StoneMor's ability to attract, train and
retain an adequate number of sales people; uncertainties associated
with the volume and timing of pre-need sales of cemetery services
and products; increased use of cremation; changes in the death
rate; changes in political or regulatory environments, including
potential changes in tax accounting and trusting policies;
StoneMor's ability to successfully implement a strategic plan
relating to producing operating improvements, strong cash flows and
further deleveraging; StoneMor's ability to complete and fund
additional acquisitions; StoneMor's ability to maintain effective
disclosure controls and procedures and internal control over
financial reporting; the effect of cybersecurity attacks due to
StoneMor's significant reliance on information technology;
uncertainties relating to the financial condition of third-party
insurance companies that fund StoneMor's pre-need funeral
contracts; and various other uncertainties associated with the
death care industry and StoneMor's operations in particular.
When considering forward-looking statements, you should keep in
mind the risk factors and other cautionary statements set forth in
StoneMor's Annual Report on Form 10-K and its Quarterly Reports on
Form 10-Q filed with the SEC. StoneMor assumes no obligation to
publicly update or revise any forward-looking statements made
herein or any other forward-looking statements made by it, whether
as a result of new information, future events, or otherwise.
CONTACT: John McNamara
(215) 826-2800
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