StoneMor Partners L.P. (NYSE:STON) ("StoneMor") announced its
results of operations for the three months ended June 30, 2013.
Investors are encouraged to read the Company's quarterly report on
Form 10-Q to be filed with the SEC, which contains additional
details, as well as financial tables, and can be found at
www.stonemor.com.
Financial Highlights
- Revenues (GAAP) for the three months ended June 30, 2013 were
$62.4 million compared to $61.5 million for the three months ended
June 30, 2012, a 1.5% increase.
- Production-based revenue (non-GAAP) for the three months ended
June 30, 2013 increased by $4.0 million, or 5.3%, to $79.6 million
from $75.6 million during the prior-year period.
- Operating profits (GAAP) increased by $0.5 million, or 29.4%,
to $2.3 million for the three months ended June 30, 2013, as
compared to $1.8 million in the prior-year period.
- Adjusted operating profits (non-GAAP) increased by $1.1
million, or 8.2%, to $13.7 million for the three-month period ended
June 30, 2013 from $12.6 million in the same period last year.
- Operating cash flows (GAAP) increased by $3.6 million, or
60.1%, to $9.6 million in the three months ended June 30, 2013, as
compared to $6.0 million in the prior-year period.
- Distributable free cash flow (non-GAAP) for the three-month
period ended June 30, 2013 increased to $24.9 million from $13.3
million for the same period last year, an 86.8 % increase.
- Net loss (GAAP) for the three months ended June 30, 2013 was
$11.8 million, as compared to a loss of $2.2 million in the
prior-year period.
The Company reports its financial results in accordance with
U.S. GAAP. However, management believes that certain non-GAAP
financial measures used in managing the business may provide
investors with additional information regarding underlying trends
and ongoing results on a comparable basis. Specifically,
management believes that production-based revenues and adjusted
operating profit allow the investor to gain insight into the
current operating performance of the Company. Please see the
section of this press release "Non-GAAP Financial Measures" to view
the reconciliation tables previously presented in the body of the
press release. Non-GAAP financial measures used by the Company
should not be considered as alternatives to GAAP financial
measures, and you should not consider such non-GAAP financial
measures in isolation or as a substitute for an analysis of the
Company's results as reported under U.S. GAAP.
Larry Miller, StoneMor's President and CEO commented, "StoneMor
put in another strong performance in the second quarter. As we
have discussed for some time now, one aspect of our strategic plan
includes increasing our funeral home presence. To that end,
since the beginning of 2012, we have acquired 23 funeral homes, 21
of which were acquired since June 30, 2012. These acquisitions
helped drive a 36.0% year-over-year increase in second quarter
revenues from our funeral home operations. That, combined with
a decrease in corporate overhead contributed to more than a 29.4%
increase in GAAP operating profits in the quarter.
"We generated a GAAP loss for the quarter which was mostly
attributable to costs associated with the refinancing of our 10.25
% Senior Notes in May 2013. Those costs included a $14.9
million cash charge as well as $6.7 million in other related
one-time non-cash charges. In turn, those charges were
partially offset by a number of non-recurring gains, including
$11.3 million related to a legal settlement. Similarly, the
86.8% year-over-year increase in our distributable free cash flow
was also primarily attributable to one-time gains related to the
legal settlement. So clearly our GAAP results and distributable
free cash flow were dramatically impacted by a number of offsetting
one-time events.
"Looking at our other key performance measures, production-based
revenues and adjusted operating profits, we showed solid
year-over-year improvement. This was a very busy quarter from
the standpoint of positioning ourselves for additional
growth. The previously announced refinancing of our Senior
Notes has extended the maturity date to 2021 and will generate
significant interest cost savings. Despite the associated
costs, we are very happy with the long-term benefits we gained from
the refinancing. In fact, the anticipated savings were strong
enough that we increased our quarterly distribution to $0.60 per
unit just after the refinancing, the second such increase in the
quarter and the third increase in the last eight months.
"Our capital management efforts, combined with solid operating
performance, keep us on track for what we believe will be continued
strong financial results throughout the year."
Investor Conference Call and Webcast
StoneMor will conduct a conference call to discuss 2013 second
quarter results today, Wednesday, August 7, 2013 at 11:00 a.m. EDT.
The conference call can be accessed by calling (800)
354-6885. An audio replay of the conference call will be
available by calling (800) 633-8284 through 1:00 p.m. EDT on August
21, 2013. The reservation number for the audio replay is
21668875. A live webcast of the conference call will also be
available to investors who may access the call through the investor
relations section of www.stonemor.com. An audio replay of the
conference call will also be archived on StoneMor's website at
www.stonemor.com.
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 277 cemeteries and 92 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 that 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 StoneMor's operating activities, the plans and
objectives of its management, assumptions regarding its future
performance and plans, and any financial guidance provided, as well
as certain information in other filings with the Securities and
Exchange Commission and elsewhere, are forward-looking
statements. 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 StoneMor's
actual results of operations to differ materially from those
expressed or implied by forward-looking statements, including, but
not limited to, the following: 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; StoneMor's ability to service its debt and pay
distributions; the decline in the fair value of certain equity and
debt securities held in its 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 the political or regulatory environments,
including potential changes in tax accounting and trusting
policies; StoneMor's ability to successfully implement a strategic
plan relating to achieving operating improvement, strong cash flows
and further deleveraging; StoneMor's ability to successfully
compete in the cemetery and funeral home industry; uncertainties
associated with the integration or the anticipated benefits of
StoneMor's recent acquisitions and any future acquisitions;
StoneMor's ability to complete and fund additional acquisitions;
litigation or legal proceedings that could expose StoneMor to
significant liabilities and damage its reputation; StoneMor's
ability to maintain effective disclosure controls and procedures
and internal control over financial reporting; the effects of cyber
security 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, the reader should
keep in mind the risk factors and other cautionary statements set
forth in StoneMor's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q filed with the Securities and Exchange
Commission. Except as required under applicable law, StoneMor
assumes no obligation to update or revise any forward-looking
statements made herein or any other forward-looking statements made
by StoneMor, whether as a result of new information, future events,
or otherwise.
Non-GAAP Financial Measures
Production Based Revenue
We present production based revenue because management believes
it provides for a useful measure of both the value of contracts
written and investment and other income generated during a given
period and is a critical component of adjusted operating
profit.
Production based revenue is a non-GAAP financial measure that
may not be consistent with other similar non-GAAP financial
measures presented by other publicly traded companies.
Adjusted Operating Profit
We present Adjusted Operating Profit because management believes
it provides for a useful measure of economic value added by
presenting an effective matching of the value of current and future
revenue sources generated within a given period to the cost of
producing such revenue and managing our day to day operations
within that same period. It is a significant measure that we
believe is an indicator of eventual profit generated within a given
period of time.
Adjusted Operating Profit is a non-GAAP financial measure that
may not be consistent with other similar non-GAAP financial
measures presented by other publicly traded companies.
Adjusted Operating Cash Generated
We present adjusted operating cash generated revenue because
management believes it provides for a useful measure of the amount
of cash generated that is available to make capital expenditures
and partner distributions once all cash flow timing issues have
been settled.
Adjusted operating cash generated is a non-GAAP financial
measure that may not be consistent with other similar non-GAAP
financial measures presented by other publicly traded
companies.
Distributable Free Cash Flow
We present Distributable Free Cash Flow because management
believes this information is a useful adjunct to Net Cash Provided
by (Used in) Operating Activities under GAAP. Distributable
Free Cash Flow is a significant liquidity metric that we believe is
an indicator of our ability to generate cash flow during any
quarter at a level sufficient to pay the quarterly cash
distribution to the holders of our common units and for other
purposes, such as repaying debt and expanding through strategic
investments.
Distributable Free Cash Flow is similar to quantitative
standards of free cash flow used throughout the deathcare industry
and to quantitative standards of distributable cash flow used
throughout the investment community with respect to publicly traded
partnerships, but is not intended to be a prediction of the
future. However, our calculation of distributable free cash
flow may not be consistent with calculations of free cash flow,
distributable cash flow or other similarly titled measures of other
companies. Distributable Free Cash Flow should not be used as
a substitute for the GAAP measure of cash flows from operating,
investing, or financing activities.
Production Based Partners' Capital
We present production based partners' capital as a means to
provide better insight into the value that our activities
contribute to the enterprise. Because a portion of our revenues and
direct selling expenses are not captured on our balance sheet until
we deliver the underlying goods or services, we believe that by
including these items in our view of partners' capital, we gain
better insight into the value creation.
Reconciliation of Production
Based Revenue (non-GAAP) and Adjusted Operating Profit (non-GAAP)
to Revenue (GAAP) and Operating Profit (GAAP)
|
Three months
ended |
Three months
ended |
|
|
|
June 30,
2013 |
June 30,
2012 |
|
|
|
(In
thousands) |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Change in |
Change in |
|
Results |
GAAP |
GAAP |
Results |
GAAP |
GAAP |
GAAP results |
GAAP results |
Revenues |
(non-GAAP) |
Adjustments |
Results |
(non-GAAP) |
Adjustments |
Results |
($) |
(%) |
|
|
|
|
|
|
|
|
|
Pre-need cemetery revenues |
$ 36,796 |
$ (12,961) |
$ 23,835 |
$ 33,773 |
$ (8,631) |
$ 25,142 |
$ (1,307) |
-5.2% |
At-need cemetery revenues |
20,595 |
(1,570) |
19,025 |
20,428 |
(850) |
19,578 |
(553) |
-2.8% |
Investment income from trusts |
7,403 |
(1,405) |
5,998 |
10,542 |
(4,526) |
6,016 |
(18) |
-0.3% |
Interest income |
1,860 |
-- |
1,860 |
1,799 |
-- |
1,799 |
61 |
3.4% |
Funeral home revenues |
11,983 |
(1,307) |
10,676 |
8,189 |
(334) |
7,855 |
2,821 |
35.9% |
Other cemetery revenues |
960 |
68 |
1,028 |
873 |
245 |
1,118 |
(90) |
-8.1% |
|
|
|
|
|
|
|
|
|
Total revenues |
79,597 |
(17,175) |
62,422 |
75,604 |
(14,096) |
61,508 |
914 |
1.5% |
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
10,145 |
(2,433) |
7,712 |
8,788 |
(1,552) |
7,236 |
476 |
6.6% |
Cemetery expense |
15,408 |
-- |
15,408 |
14,775 |
-- |
14,775 |
633 |
4.3% |
Selling expense |
15,497 |
(3,279) |
12,218 |
14,778 |
(1,655) |
13,123 |
(905) |
-6.9% |
General and administrative expense |
7,898 |
-- |
7,898 |
7,195 |
-- |
7,195 |
703 |
9.8% |
Corporate overhead |
5,672 |
-- |
5,672 |
7,756 |
-- |
7,756 |
(2,084) |
-26.9% |
Depreciation and amortization |
2,451 |
-- |
2,451 |
2,230 |
-- |
2,230 |
221 |
9.9% |
Funeral home expense |
9,498 |
(134) |
9,364 |
6,688 |
(73) |
6,615 |
2,749 |
41.6% |
Acquisition related costs, net of
recoveries |
(625) |
-- |
(625) |
782 |
-- |
782 |
(1,407) |
-179.9% |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
65,944 |
(5,846) |
60,098 |
62,992 |
(3,280) |
59,712 |
386 |
0.6% |
|
|
|
|
|
|
|
|
|
Operating profit |
$ 13,653 |
$ (11,329) |
$ 2,324 |
$ 12,612 |
$ (10,816) |
$ 1,796 |
$ 528 |
29.4% |
|
|
|
|
|
|
|
|
|
|
Six months
ended |
Six months
ended |
|
|
|
June 30,
2013 |
June 30,
2012 |
|
|
|
(In
thousands) |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Change in |
Change in |
|
Results |
GAAP |
GAAP |
Results |
GAAP |
GAAP |
GAAP results |
GAAP results |
Revenues |
(non-GAAP) |
Adjustments |
Results |
(non-GAAP) |
Adjustments |
Results |
($) |
(%) |
|
|
|
|
|
|
|
|
|
Pre-need cemetery revenues |
$ 67,739 |
$ (22,390) |
$ 45,349 |
$ 63,615 |
$ (15,726) |
$ 47,889 |
$ (2,540) |
-5.3% |
At-need cemetery revenues |
41,337 |
(2,934) |
38,403 |
40,860 |
(1,978) |
38,882 |
(479) |
-1.2% |
Investment income from trusts |
20,505 |
(9,878) |
10,627 |
20,405 |
(8,909) |
11,496 |
(869) |
-7.6% |
Interest income |
3,725 |
-- |
3,725 |
3,737 |
-- |
3,737 |
(12) |
-0.3% |
Funeral home revenues |
24,810 |
(2,716) |
22,094 |
17,462 |
(670) |
16,792 |
5,302 |
31.6% |
Other cemetery revenues |
1,702 |
134 |
1,836 |
1,792 |
507 |
2,299 |
(463) |
-20.1% |
|
|
|
|
|
|
|
|
|
Total revenues |
159,818 |
(37,784) |
122,034 |
147,871 |
(26,776) |
121,095 |
939 |
0.8% |
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
17,898 |
(3,896) |
14,002 |
16,419 |
(2,763) |
13,656 |
346 |
2.5% |
Cemetery expense |
28,193 |
-- |
28,193 |
27,567 |
-- |
27,567 |
626 |
2.3% |
Selling expense |
29,332 |
(5,890) |
23,442 |
28,612 |
(3,702) |
24,910 |
(1,468) |
-5.9% |
General and administrative expense |
15,480 |
-- |
15,480 |
14,388 |
-- |
14,388 |
1,092 |
7.6% |
Corporate overhead |
13,660 |
-- |
13,660 |
14,359 |
-- |
14,359 |
(699) |
-4.9% |
Depreciation and amortization |
4,781 |
-- |
4,781 |
4,560 |
-- |
4,560 |
221 |
4.8% |
Funeral home expense |
18,421 |
(321) |
18,100 |
13,487 |
(116) |
13,371 |
4,729 |
35.4% |
Acquisition related costs, net of
recoveries |
658 |
-- |
658 |
1,113 |
-- |
1,113 |
(455) |
-40.9% |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
128,423 |
(10,107) |
118,316 |
120,505 |
(6,581) |
113,924 |
4,392 |
3.9% |
|
|
|
|
|
|
|
|
|
Operating profit |
$ 31,395 |
$ (27,677) |
$ 3,718 |
$ 27,366 |
$ (20,195) |
$ 7,171 |
$ (3,453) |
-48.2% |
|
|
|
|
|
|
|
|
|
The tables above analyze our results of operations and the
changes therein for the three months and six months ended June 30,
2013, as compared to the same periods last year. The tables
are structured so that our readers can determine whether changes
were based upon changes in the level of merchandise and services
and other revenues generated during the periods and/ or changes in
the timing when merchandise and services were delivered.
Critical Financial
Measures
|
Three months
ended |
Six months
ended |
|
June
30, |
June
30, |
|
2013 |
2012 |
2013 |
2012 |
|
(In
thousands) |
(In
thousands) |
|
|
|
|
|
Total revenues (a) |
$ 62,422 |
$ 61,508 |
$ 122,034 |
$ 121,095 |
Production based revenue consisting of
the total value of cemetery contracts written, funeral home
revenues and investment and other income (b) |
79,597 |
75,604 |
159,818 |
147,871 |
|
|
|
|
|
Operating profit (a) |
2,324 |
1,796 |
3,718 |
7,171 |
Adjusted operating profit (b) |
13,653 |
12,612 |
31,395 |
27,366 |
|
|
|
|
|
Net income (loss) (a) |
(11,809) |
(2,169) |
(14,009) |
(139) |
|
|
|
|
|
Operating cash flows (a) |
9,616 |
6,005 |
16,483 |
14,195 |
Adjusted operating cash generated (b) |
27,663 |
13,482 |
45,784 |
27,868 |
Distributable free cash flow generated
(b) |
$ 24,889 |
$ 13,327 |
$ 42,522 |
$ 27,146 |
|
|
|
|
|
|
|
|
|
|
|
As of |
As of |
|
|
|
June 30, 2013 |
December 31, 2012 |
|
|
|
|
|
|
|
Distribution coverage quarters (b) |
8.31 |
6.57 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) This is a GAAP financial
measure. |
(b) This is a non-GAAP financial
measure as defined by the Securities and Exchange Commission.
Please see the reconciliation to GAAP measures or support
calculation within this press release. |
Reconciliation of Adjusted Operating
Profit (non-GAAP) to Operating Profit (GAAP)
|
Three months
ended June 30, |
Six months ended
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(In
thousands) |
(In
thousands) |
|
|
|
|
|
GAAP operating profit |
$ 2,324 |
$ 1,796 |
$ 3,718 |
$ 7,171 |
|
|
|
|
|
Increase in applicable deferred
revenues |
17,175 |
14,096 |
37,784 |
26,776 |
|
|
|
|
|
Increase in deferred cost of goods sold
and selling and obtaining costs |
(5,846) |
(3,280) |
(10,107) |
(6,581) |
|
|
|
|
|
Adjusted operating profit |
$ 13,653 |
$ 12,612 |
$ 31,395 |
$ 27,366 |
Reconciliation of Production Based
Revenues (non-GAAP) to Revenues (GAAP)
|
Three months
ended June 30, |
Increase |
Increase |
|
2013 |
2012 |
(Decrease) ($) |
(Decrease) (%) |
|
(In
thousands) |
|
|
|
|
|
Value of pre-need
cemetery contracts written |
$ 36,796 |
$ 33,773 |
$ 3,023 |
9.0% |
Value of at-need cemetery contracts
written |
20,595 |
20,428 |
167 |
0.8% |
Investment income from trusts |
7,403 |
10,542 |
(3,139) |
-29.8% |
Interest income |
1,860 |
1,799 |
61 |
3.4% |
Funeral home revenues |
11,983 |
8,189 |
3,794 |
46.3% |
Other cemetery revenues |
960 |
873 |
87 |
10.0% |
|
|
|
|
|
Total production based revenues |
$ 79,597 |
$ 75,604 |
$ 3,993 |
5.3% |
|
|
|
|
|
Less: |
|
|
|
|
Increase in deferred sales revenue and
investment income |
(17,175) |
(14,096) |
(3,079) |
21.8% |
|
|
|
|
|
Total GAAP revenues |
$ 62,422 |
$ 61,508 |
$ 914 |
1.5% |
Reconciliation of Adjusted Operating Cash
Flows (non-GAAP) and Distributable Free Cash Flow (Non-GAAP) to
Operating Cash Flows (GAAP)
|
Three months
ended June 30, |
Six months ended
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(In
thousands) |
(In
thousands) |
|
|
|
|
|
GAAP operating cash flows |
$ 9,616 |
$ 6,005 |
$ 16,483 |
$ 14,195 |
|
|
|
|
|
Add: net cash inflows into (outflows from)
the merchandise trust |
10,450 |
(773) |
22,611 |
1,917 |
Add net increase in accounts receivable |
5,814 |
6,806 |
7,199 |
8,180 |
Add: net decrease in merchandise
liabilities |
608 |
1,715 |
1,612 |
4,451 |
|
|
|
|
|
Deduct: net (increase) decrease in accounts
payable and accrued expenses |
1,601 |
929 |
(3,677) |
(348) |
Other float related changes |
(426) |
(1,200) |
1,556 |
(527) |
|
|
|
|
|
Adjusted operating cash flow generated |
27,663 |
13,482 |
45,784 |
27,868 |
|
|
|
|
|
Less: maintenance capital expenditures |
(2,149) |
(937) |
(3,920) |
(1,835) |
Plus: growth capital expenditures
reclassified as operating expenses and deducted from adjusted
operating cash generated (a) |
(625) |
782 |
658 |
1,113 |
|
|
|
|
|
Distributable free cash flow generated |
24,889 |
13,327 |
42,522 |
27,146 |
Cash on hand - beginning of the period |
8,536 |
8,778 |
7,946 |
12,058 |
|
|
|
|
|
Distributable cash available for the
period |
33,425 |
22,105 |
50,468 |
39,204 |
|
|
|
|
|
Partner distributions made |
$ 13,242 |
$ 11,783 |
$ 25,267 |
$ 23,563 |
|
|
|
|
|
(a) We maintain a credit facility
from which to make acquisitions and pay acquisition related costs.
We utilize this line for these costs. Accordingly, distributable
free cash flow is not negatively impacted by amounts spent on
acquisitions that are recorded as expenses. |
Production Based Partners'
Capital
|
As of |
As of |
|
June 30, 2013 |
December 31,
2012 |
|
(In thousands) |
(In thousands) |
Partners' Capital |
$ 138,649 |
$ 135,182 |
|
|
|
Deferred selling and obtaining costs |
(82,501) |
(76,317) |
Deferred cemetery revenues, net |
544,322 |
497,861 |
|
|
|
Production based partners' capital |
$ 600,470 |
$ 556,726 |
Selected Net Assets
|
As of |
As of |
|
June 30, 2013 |
December 31,
2012 |
|
(In
thousands) |
|
|
|
Selected assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 14,075 |
$ 7,946 |
Accounts receivable, net of allowance |
54,396 |
51,895 |
Long-term accounts receivable, net of
allowance |
77,297 |
71,521 |
Merchandise trusts, restricted, at fair
value |
414,382 |
375,973 |
|
|
|
Total selected assets |
560,150 |
507,335 |
|
|
|
Selected liabilities: |
|
|
|
|
|
Accounts payable and accrued liabilities |
32,992 |
28,973 |
Accrued interest |
1,625 |
1,833 |
Current portion, long-term debt |
6,936 |
2,175 |
Other long-term liabilities |
1,616 |
1,835 |
Long-term debt |
266,290 |
252,774 |
Deferred tax liabilities |
12,554 |
14,910 |
Merchandise liability |
127,875 |
125,869 |
|
|
|
Total selected liabilities |
449,888 |
428,369 |
|
|
|
Total selected net assets |
$ 110,262 |
$ 78,966 |
|
|
|
Distribution coverage quarters (a) |
8.31 |
6.57 |
|
|
|
(a) This is a measure of the
ratio of selected net assets to a quarterly distribution amount.
The quarterly distribution amount is calculated by taking the end
of the period outstanding common units (21,350,152 at June 30, 2013
and 19,568,448 at December 31, 2012, respectively) and multiplying
these units by the declared distribution. This total is then added
to the distribution due to the General Partner based upon the same
variables. |
StoneMor Partners
L.P. Condensed Consolidated Balance Sheet
(In thousands) (Unaudited)
|
|
|
|
June 30, |
December 31, |
|
2013 |
2012 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 14,075 |
$ 7,946 |
Accounts receivable, net of
allowance |
54,396 |
51,895 |
Prepaid expenses |
5,565 |
3,832 |
Other current assets |
18,679 |
17,418 |
Total current assets |
92,715 |
81,091 |
|
|
|
Long-term accounts receivable, net of
allowance |
77,297 |
71,521 |
Cemetery property |
312,506 |
309,980 |
Property and equipment, net of accumulated
depreciation |
84,793 |
79,740 |
Merchandise trusts, restricted, at fair
value |
414,382 |
375,973 |
Perpetual care trusts, restricted, at fair
value |
302,773 |
282,313 |
Deferred financing costs, net of accumulated
amortization |
8,865 |
9,238 |
Deferred selling and obtaining costs |
82,501 |
76,317 |
Deferred tax assets |
381 |
381 |
Goodwill |
47,570 |
42,392 |
Other assets |
11,849 |
14,779 |
Total assets |
$ 1,435,632 |
$ 1,343,725 |
|
|
|
Liabilities and partners'
capital |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
liabilities |
$ 32,992 |
$ 28,973 |
Accrued interest |
1,625 |
1,833 |
Current portion, long-term debt |
6,936 |
2,175 |
Total current liabilities |
41,553 |
32,981 |
|
|
|
Other long-term liabilities |
1,616 |
1,835 |
Long-term debt |
266,290 |
252,774 |
Deferred cemetery revenues, net |
544,322 |
497,861 |
Deferred tax liabilities |
12,554 |
14,910 |
Merchandise liability |
127,875 |
125,869 |
Perpetual care trust corpus |
302,773 |
282,313 |
Total liabilities |
1,296,983 |
1,208,543 |
|
|
|
Commitments and contingencies |
|
|
Partners' capital |
|
|
General partner |
(893) |
386 |
Common partners |
139,542 |
134,796 |
Total partners' capital |
138,649 |
135,182 |
|
|
|
Total liabilities and partners' capital |
$ 1,435,632 |
$ 1,343,725 |
|
|
|
See accompanying notes to the Unaudited Condensed Consolidated
Financial Statements on the Quarterly Report to be filed on Form
10-Q for the quarter ended June 30, 2013.
StoneMor Partners
L.P. Condensed Consolidated Statement of
Operations (In thousands, except per unit
data)
|
Three months
ended |
Six months
ended |
|
June 30, |
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(Unaudited) |
(Unaudited) |
Revenues: |
|
|
|
|
Cemetery |
|
|
|
|
Merchandise |
$ 28,669 |
$ 30,337 |
$ 55,321 |
$ 57,481 |
Services |
11,072 |
11,265 |
22,371 |
23,347 |
Investment and other |
12,005 |
12,051 |
22,248 |
23,475 |
Funeral home |
|
|
|
|
Merchandise |
4,517 |
3,569 |
9,470 |
7,587 |
Services |
6,159 |
4,286 |
12,624 |
9,205 |
Total revenues |
62,422 |
61,508 |
122,034 |
121,095 |
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
Cost of goods sold (exclusive of
depreciation shown separately below): |
|
|
|
|
Perpetual care |
1,500 |
1,415 |
2,781 |
2,782 |
Merchandise |
6,212 |
5,821 |
11,221 |
10,874 |
Cemetery expense |
15,408 |
14,775 |
28,193 |
27,567 |
Selling expense |
12,218 |
13,123 |
23,442 |
24,910 |
General and administrative expense |
7,898 |
7,195 |
15,480 |
14,388 |
Corporate overhead (including $360 and
$210 in unit-based compensation for the three months ended
June 30, 2013 and 2012, and $690 and $409 for the six months ended
June 30, 2013 and 2012, respectively) |
5,672 |
7,756 |
13,660 |
14,359 |
Depreciation and amortization |
2,451 |
2,230 |
4,781 |
4,560 |
Funeral home expense |
|
|
|
|
Merchandise |
1,703 |
1,107 |
3,225 |
2,530 |
Services |
4,768 |
3,302 |
9,325 |
6,707 |
Other |
2,893 |
2,206 |
5,550 |
4,134 |
Acquisition related costs, net of
recoveries |
(625) |
782 |
658 |
1,113 |
Total cost and expenses |
60,098 |
59,712 |
118,316 |
113,924 |
|
|
|
|
|
Operating profit |
2,324 |
1,796 |
3,718 |
7,171 |
|
|
|
|
|
Gain (loss) on termination of operating
agreement |
-- |
(83) |
-- |
1,737 |
Gain on settlement agreement, net |
11,349 |
-- |
12,261 |
-- |
Gain on acquisition |
-- |
122 |
-- |
122 |
Loss on early extinguishment of debt |
21,595 |
-- |
21,595 |
-- |
Gain on sale of other assets |
155 |
-- |
155 |
-- |
Interest expense |
5,132 |
4,870 |
10,595 |
9,836 |
|
|
|
|
|
Net loss before income taxes |
(12,899) |
(3,035) |
(16,056) |
(806) |
|
|
|
|
|
Income tax expense (benefit) |
|
|
|
|
State |
165 |
97 |
221 |
242 |
Federal |
(1,255) |
(963) |
(2,268) |
(909) |
Total income tax benefit |
(1,090) |
(866) |
(2,047) |
(667) |
|
|
|
|
|
Net loss |
$ (11,809) |
$ (2,169) |
$ (14,009) |
$ (139) |
|
|
|
|
|
General partner's interest in net loss for
the period |
$ (218) |
$ (43) |
$ (258) |
$ (3) |
Limited partners' interest in net loss for
the period |
$ (11,591) |
$ (2,126) |
$ (13,751) |
$ (136) |
|
|
|
|
|
Net loss per limited partner unit (basic and
diluted) |
$ (.54) |
$ (.11) |
$ (.67) |
$ (.01) |
|
|
|
|
|
Weighted average number of limited partners'
units outstanding (basic and diluted) |
21,345 |
19,375 |
20,541 |
19,372 |
Distributions declared per unit |
$ .595 |
$ .585 |
$ 1.185 |
$ 1.170 |
See accompanying notes to the Unaudited Condensed Consolidated
Financial Statements on the Quarterly Report to be filed on Form
10-Q for the quarter ended June 30, 2013.
StoneMor Partners L.P.
Condensed Consolidated Statement of Cash Flows (In
thousands)
|
Three months ended June
30, |
Six months ended June
30, |
|
2013 |
2012 |
2013 |
2012 |
|
(Unaudited) |
(Unaudited) |
Operating activities: |
|
|
|
|
Net loss |
$ (11,809) |
$ (2,169) |
$ (14,009) |
$ (139) |
Adjustments to reconcile net loss to net
cash provided by operating activities: |
|
|
|
|
Cost of lots sold |
2,459 |
2,146 |
4,194 |
3,979 |
Depreciation and amortization |
2,451 |
2,230 |
4,781 |
4,560 |
Unit-based compensation |
360 |
211 |
690 |
409 |
Accretion of debt discount |
521 |
287 |
1,011 |
723 |
Gain on settlement agreement, net |
912 |
-- |
-- |
-- |
Gain on termination of operating
agreement |
-- |
83 |
-- |
(1,737) |
Gain on acquisition |
-- |
(122) |
-- |
(122) |
Gain on sale of other assets |
(155) |
-- |
(155) |
-- |
Loss on early extinguishment of debt |
21,595 |
-- |
21,595 |
-- |
Changes in assets and liabilities that
provided (used) cash: |
|
|
|
|
Accounts receivable |
(5,814) |
(6,806) |
(7,199) |
(8,180) |
Allowance for doubtful accounts |
1,234 |
1,930 |
(83) |
3,293 |
Merchandise trust fund |
(10,450) |
773 |
(22,611) |
(1,917) |
Prepaid expenses |
(2,299) |
302 |
(1,733) |
(1,169) |
Other current assets |
(1,957) |
(2,041) |
(1,261) |
(860) |
Other assets |
4,742 |
1,967 |
3,972 |
139 |
Accounts payable and accrued and other
liabilities |
(1,601) |
(929) |
3,677 |
348 |
Deferred selling and obtaining costs |
(3,439) |
(1,192) |
(6,184) |
(3,380) |
Deferred cemetery revenue |
14,779 |
12,081 |
33,766 |
23,699 |
Deferred taxes (net) |
(1,305) |
(1,031) |
(2,356) |
(1,000) |
Merchandise liability |
(608) |
(1,715) |
(1,612) |
(4,451) |
Net cash provided by operating
activities |
9,616 |
6,005 |
16,483 |
14,195 |
Investing activities: |
|
|
|
|
|
|
|
|
|
Cash paid for cemetery property |
(1,176) |
(2,383) |
(2,252) |
(3,600) |
Purchase of subsidiaries |
-- |
(1,774) |
(9,100) |
(3,426) |
Cash paid for property and equipment |
(2,149) |
(937) |
(3,920) |
(1,835) |
Proceeds from sales of other assets |
155 |
-- |
155 |
-- |
Net cash used in investing
activities |
(3,170) |
(5,094) |
(15,117) |
(8,861) |
Financing activities: |
|
|
|
|
Cash distribution |
(13,242) |
(11,783) |
(25,267) |
(23,563) |
Additional borrowings on long-term
debt |
196,158 |
21,850 |
217,106 |
29,200 |
Repayments of long-term debt |
(164,278) |
(12,136) |
(205,800) |
(13,422) |
Proceeds from public offering |
-- |
-- |
38,377 |
-- |
Fees paid related to early extinguishment
of debt |
(14,920) |
-- |
(14,920) |
-- |
Cost of financing activities |
(4,625) |
167 |
(4,733) |
(1,820) |
Net cash provided by (used in) financing
activities |
(907) |
(1,902) |
4,763 |
(9,605) |
Net increase (decrease) in cash and
cash equivalents |
5,539 |
(991) |
6,129 |
(4,271) |
Cash and cash equivalents - Beginning
of period |
8,536 |
8,778 |
7,946 |
12,058 |
Cash and cash equivalents - End of
period |
$ 14,075 |
$ 7,787 |
$ 14,075 |
$ 7,787 |
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
Cash paid during the period for
interest |
$ 8,509 |
$ 8,425 |
$ 9,754 |
$ 9,048 |
Cash paid during the period for income
taxes |
$ 2,681 |
$ 3,552 |
$ 3,132 |
$ 3,655 |
|
|
|
|
|
Non-cash investing and financing
activities: |
|
|
|
|
Acquisition of assets by financing |
$ 30 |
$ 25 |
$ 92 |
$ 53 |
Issuance of limited partner units for
cemetery acquisition |
$ 126 |
$ 603 |
$ 3,718 |
$ 603 |
Acquisition of assets by assumption of
directly related liability |
$ -- |
$ 544 |
$ 3,924 |
$ 544 |
See accompanying notes to the Unaudited Condensed
Consolidated Financial Statements on the Quarterly Report to
be filed on Form 10-Q for the period ended June 30, 2013.
CONTACT: John McNamara
(215) 826-2800
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