StoneMor Partners L.P. (NYSE:STON) announced its results of
operations for the three months and year ended December 31, 2013.
Investors are encouraged to read the Company's annual report on
Form 10-K to be filed with the SEC which contains additional
details as well as financial tables and can be found at
www.stonemor.com.
Quarterly Financial Highlights
- Revenues (GAAP) for the three month period ended December 31,
2013 were $63.1 million as compared to $59.3 million for the prior
year period, a 6.4 % increase.
- Production based revenues (non-GAAP) for the three month period
ended December 31, 2013 were $86.2 million, up from $73.4 million
in the prior year period, a 17.4% increase.
- For the three month period ended December 31, 2013, operating
profit (GAAP) increased 18.8% to $1.9 million, versus $1.6 million
in the prior year period.
- For the three month period ended December 31, 2013, adjusted
operating profits (non-GAAP) increased 73.1% to $20.6 million as
compared to $11.9 million in the prior year period.
- For the three month period ended December 31, 2013, cash flows
used in operations (GAAP) were $1.8 million, versus $1.1 million
provided by operations in same period last year.
- For the three months ended December 31, 2013 distributable free
cash flow (non-GAAP) increased 75.9% to $ 19.0 million from $10.8
million in the prior year period.
- For the three months ended December 31, 2013, net loss (GAAP)
of $3.5 million narrowed 10.3% from the loss of $3.9 million
reported in the same three month period of 2012.
- Backlog* increased $15.2 million during the three month period
ended December 31, 2013 compared to the $14.6 million increase in
the prior year period.
- Cash, accounts receivable and merchandise trusts, net of
merchandise liabilities, totaled $449.4 million at year end
2013.
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. 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.
"StoneMor closed the year with a solid fourth quarter, showing
improvement over the fourth quarter of 2012 in nearly every
category," said Lawrence Miller, President and Chief Executive
Officer. "GAAP revenues and operating income in the fourth quarter
of 2013 both improved over the fourth quarter of last year, while
such non-GAAP financial measures as production based revenue and
adjusted operating profits showed very strong growth, up 17.4% and
73.1% respectively. Driving much of this performance has been the
ongoing contributions from acquisitions made in 2012 and 2013. The
contributions from acquisitions also helped power a 75.9% increase
in our distributable cash flow (non-GAAP) compared to the fourth
quarter of 2012.
"Strategically, StoneMor had a very busy and positive 2013 as we
were active on a number of different fronts," continued Miller. "We
believe the year's activity to be an excellent example for
investors to observe StoneMor's acquisition and growth strategy in
full display. First, the acquisition of Seawinds Funeral Homes in
Florida illustrates our commitment to increasing the number of
funeral homes in our portfolio as well as our ongoing general focus
on the Florida market. Next, the purchase of Forest Lawn Cemetery,
in Richmond, Virginia, though small, displays our success at
acquiring cemeteries near medium sized urban markets. And lastly,
the pending arrangement with the Archdiocese of Philadelphia will,
subject to closing conditions, be the second largest transaction in
our history as a public company and we hope will be of a model for
similar transactions where and when they are appropriate.
"We also demonstrated our commitment to maintaining a balance
sheet that is healthy, robust, and allows us to be as opportunistic
as we can. Early in 2013, we increased the availability under our
credit facility, followed in March by an offering of 1.6 million
common units. In May, we engaged in a significant refinancing,
tendering for and redeeming all of our 10.25% Senior Notes due
2017, and issuing $175 million of 7.875% Senior Notes due 2021,
resulting in annual interest cost savings of about $1.6 million and
extended duration of our debt. We also measure our financial
strength by monitoring the value of our cash, accounts receivable
and merchandise trusts minus the merchandise liability. The number
reached $449.4 million in 2013 and helps to illustrate, in our
view, that we are supported by some very large cash positions.
Finally, our backlog reached $482.6 million, further highlighting
some of our potential future cash flows.
"StoneMor's ability to access the capital markets as we did in
2013 is, we believe, a testament to our credibility among equity
and debt investors. Raising our distribution twice, as we did
during 2013, is a reflection of that credibility," concluded
Miller.
* Backlog is defined as deferred cemetery revenues and
investment income less deferred selling and obtaining costs. Does
not include deferred unrealized gains and losses on merchandise
trust assets.
Yearly Financial Highlights
- Revenues (GAAP) improved from $242.6 million in 2012 to $246.6
million in 2013, a 1.6% increase.
- Production based revenue (non-GAAP) increased from $296.3
million in 2012 to $326.6 million in 2013, a 10.2% increase.
- Operating profits (GAAP) decreased 53.6% to $6.4 million in
2013 from $13.8 million in 2012. The decrease was primarily
attributable to a decline in cemetery revenues and an increase in
funeral home expenses.
- Adjusted operating profits (non-GAAP) increased 24.9% to $67.2
million in 2013 from $53.8 million in 2012.
- Operating cash flows (GAAP) increased to $35.1 million in 2013
from $31.9 million provided in 2012, a 10% increase.
- Distributable free cash flow (non-GAAP) for 2013 was $76.0
million compared to $53.3 million in 2012, a 42.6% increase.
- Net loss (GAAP) for 2013 was $19.0 million versus a net loss of
$3.0 million in the prior year period. The 2013 loss was largely
attributable to costs and charges related to the early retirement
of our 10.25% Senior Notes in May 2013. These costs and charges
included a $14.9 million cash charge and $6.7 million in one-time
non-cash charges.
- Backlog* rose $61.6 million or 14.6% to $482.6 million in 2013
compared to $421.0 million in 2012.
"Our reported (GAAP) financial results for the full year were
somewhat mixed, particularly the year over year comparison of our
GAAP loss," continued Miller. "As we disclosed in our 2013 second
quarter financial results, it's important to remember that a
significant percentage of the net loss took place during the second
quarter of 2013 and was mostly related to one-time costs and
charges. As for the remainder of the GAAP loss for 2013, we have
often noted that GAAP accounting requires that we defer the value
of contracts written until such time as the underlying merchandise
is delivered or service is performed. As a consequence of this, our
GAAP financial results often reflect timing related delays between
sales and the recognition of revenues. The $83.7 million increase
in deferred revenues on our balance sheet for 2013 illustrates some
of this impact.
"We believe that production based revenue, adjusted operating
profits and distributable cash flow are useful non-GAAP measures
for evaluating our performance because adjustments are made for
such timing related items. We use these measures to manage our
business and we are very pleased that each measure showed strong
improvement on a full year basis. These increases were driven in
large part by ongoing contributions from acquisitions made in 2012
and 2013. In particular, we can see the impact of these
acquisitions in our funeral home segment, where production based
revenues increased almost 34% to $50.8 million.
"We are very excited by the strategic actions we've taken in
2013 as well as so far in 2014, when a recent unit offering raised
approximately $53.1 million, primarily for the purpose of paying
down borrowings. We believe we are well positioned to continue our
growth and we look forward to opportunities to share that growth
with our unit holders through increased distributions when
appropriate."
Investor Conference Call and Webcast
StoneMor will conduct a conference call to discuss the 2013
results today, Friday, March 14, 2014 at 10:00 a.m. Eastern Time.
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. Eastern Time
on March 28, 2014. The reservation number for the audio replay
is as follows: 21710029. A live webcast of the conference
call will also be available to investors who may access the call
through the Investors 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 278 cemeteries and 90 funeral
homes in 28 states and Puerto Rico. StoneMor is the only publicly
traded deathcare 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 Investors section, at
www.stonemor.com. Information on StoneMor's website is not
incorporated by reference into this press release and does not
constitute a part of this press release.
Forward-Looking Statements
Certain statements contained in this press release, including,
but not limited to, information regarding the status and progress
of our operating activities, the plans and objectives of our
management, assumptions regarding our future performance and plans,
and any financial guidance provided, as well as certain information
in our other filings with the SEC 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 actual results to differ
materially from those stated or implied, including, but not limited
to, the following: uncertainties associated with future revenue and
revenue growth; the effect of economic downturns; the impact of our
significant leverage on our operating plans; our ability to service
our debt and pay distributions; the decline in the fair value of
certain equity and debt securities held in our trusts; our 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; our ability to successfully
implement a strategic plan relating to achieving operating
improvements, strong cash flows and further deleveraging; our
ability to successfully compete in the cemetery and funeral home
industry; uncertainties associated with the integration or
anticipated benefits of our recent acquisitions or any future
acquisitions; our ability to complete and fund additional
acquisitions; litigation or legal proceedings that could expose us
to significant liabilities and damage our reputation; the effects
of cyber security attacks due to our significant reliance on
information technology; uncertainties relating to the financial
condition of third-party insurance companies that fund our pre-need
funeral contracts; and various other uncertainties associated with
the death care industry and our operations in particular.
When considering forward-looking statements, you should keep in
mind the risk factors and other cautionary statements set forth in
our Annual Report on Form 10-K and our other reports filed with the
SEC. Except as required under applicable law, we assume no
obligation to update or revise any forward-looking statements made
herein or any other forward-looking statements made by us, 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 period
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 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.
The following tables reconcile Non-GAAP to GAAP Measures:
Reconciliation of
Production Based Revenue and Adjusted Operating Profit (non- GAAP)
to Revenue and Operating Profit (GAAP) |
|
|
|
|
|
|
|
|
|
|
Three months
ended |
Three months
ended |
|
|
|
December 31, 2013 |
December 31, 2012 |
|
|
|
(in
thousands) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Change in |
Change in |
|
Results |
GAAP |
GAAP |
Results |
GAAP |
GAAP |
GAAP results |
GAAP results |
|
(non-GAAP) |
Adjustments |
Results |
(non-GAAP) |
Adjustments |
Results |
($) |
(%) |
Revenues |
|
|
|
|
|
|
|
|
Pre-need cemetery revenues |
$ 32,474 |
$ (11,201) |
$ 21,273 |
$ 31,842 |
$ (8,501) |
$ 23,341 |
$ (2,068) |
-8.9% |
At-need cemetery revenues |
19,613 |
(309) |
19,304 |
19,233 |
(1,354) |
17,879 |
1,425 |
8.0% |
Investment income from trusts |
17,648 |
(10,266) |
7,382 |
8,357 |
(1,515) |
6,842 |
540 |
7.9% |
Interest income |
1,717 |
-- |
1,717 |
1,726 |
-- |
1,726 |
(9) |
-0.5% |
Funeral home revenues |
13,904 |
(1,416) |
12,488 |
10,923 |
(862) |
10,061 |
2,427 |
24.1% |
Other cemetery revenues |
853 |
51 |
904 |
1,302 |
(1,837) |
(535) |
1,439 |
-269.0% |
|
|
|
|
|
|
|
|
|
Total revenues |
86,209 |
(23,141) |
63,068 |
73,383 |
(14,069) |
59,314 |
3,754 |
6.3% |
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
8,541 |
(1,786) |
6,755 |
8,344 |
(1,545) |
6,799 |
(44) |
-0.6% |
Cemetery expense |
14,866 |
-- |
14,866 |
13,591 |
-- |
13,591 |
1,275 |
9.4% |
Selling expense |
15,233 |
(2,535) |
12,698 |
12,872 |
(2,194) |
10,678 |
2,020 |
18.9% |
General and administrative expense |
8,491 |
-- |
8,491 |
7,525 |
-- |
7,525 |
966 |
12.8% |
Corporate overhead |
7,218 |
-- |
7,218 |
7,264 |
-- |
7,264 |
(46) |
-0.6% |
Depreciation and amortization |
2,389 |
-- |
2,389 |
2,672 |
-- |
2,672 |
(283) |
-10.6% |
Funeral home expense |
8,737 |
(164) |
8,573 |
8,329 |
(71) |
8,258 |
315 |
3.8% |
Acquisition related costs, net of
recoveries |
150 |
-- |
150 |
925 |
-- |
925 |
(775) |
-83.8% |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
65,625 |
(4,485) |
61,140 |
61,522 |
(3,810) |
57,712 |
3,428 |
5.9% |
|
|
|
|
|
|
|
|
|
Operating profit |
$ 20,584 |
$ (18,656) |
$ 1,928 |
$ 11,861 |
$ (10,259) |
$ 1,602 |
$ 326 |
20.3% |
|
|
|
|
|
|
|
|
|
|
Year
ended |
Year
ended |
|
|
|
December 31, 2013 |
December 31, 2012 |
|
|
|
(in
thousands) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Change in |
Change in |
|
Results |
GAAP |
GAAP |
Results |
GAAP |
GAAP |
GAAP results |
GAAP results |
|
(non-GAAP) |
Adjustments |
Results |
(non-GAAP) |
Adjustments |
Results |
($) |
(%) |
Revenues |
|
|
|
|
|
|
|
|
Pre-need cemetery revenues |
$ 134,857 |
$ (43,714) |
$ 91,143 |
$ 128,437 |
$ (31,437) |
$ 97,000 |
$ (5,857) |
-6.0% |
At-need cemetery revenues |
80,000 |
(4,568) |
75,432 |
79,346 |
(4,552) |
74,794 |
638 |
0.9% |
Investment income from trusts |
50,564 |
(26,158) |
24,406 |
38,571 |
(14,446) |
24,125 |
281 |
1.2% |
Interest income |
6,926 |
-- |
6,926 |
6,698 |
-- |
6,698 |
228 |
3.4% |
Funeral home revenues |
50,808 |
(5,853) |
44,955 |
37,988 |
(2,309) |
35,679 |
9,276 |
26.0% |
Other cemetery revenues |
3,445 |
334 |
3,779 |
5,283 |
(973) |
4,310 |
(531) |
-12.3% |
|
|
|
|
|
|
|
|
|
Total revenues |
326,600 |
(79,959) |
246,641 |
296,323 |
(53,717) |
242,606 |
4,035 |
1.7% |
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
35,382 |
(7,523) |
27,859 |
33,807 |
(5,706) |
28,101 |
(242) |
-0.9% |
Cemetery expense |
57,566 |
-- |
57,566 |
55,410 |
-- |
55,410 |
2,156 |
3.9% |
Selling expense |
58,782 |
(10,950) |
47,832 |
54,641 |
(7,763) |
46,878 |
954 |
2.0% |
General and administrative expense |
31,873 |
-- |
31,873 |
28,928 |
-- |
28,928 |
2,945 |
10.2% |
Corporate overhead |
28,875 |
-- |
28,875 |
28,169 |
-- |
28,169 |
706 |
2.5% |
Depreciation and amortization |
9,548 |
-- |
9,548 |
9,431 |
-- |
9,431 |
117 |
1.2% |
Funeral home expense |
36,319 |
(665) |
35,654 |
28,977 |
(252) |
28,725 |
6,929 |
24.1% |
Acquisition related costs, net of
recoveries |
1,051 |
-- |
1,051 |
3,123 |
-- |
3,123 |
(2,072) |
-66.3% |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
259,396 |
(19,138) |
240,258 |
242,486 |
(13,721) |
228,765 |
11,493 |
5.0% |
|
|
|
|
|
|
|
|
|
Operating profit |
$ 67,204 |
$ (60,821) |
$ 6,383 |
$ 53,837 |
$ (39,996) |
$ 13,841 |
$ (7,458) |
-53.9% |
The tables above analyze our results of operation and the
changes therein for the three and twelve months ended December 31,
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 each period and/ or changes in
the timing when merchandise and services were delivered.
|
Critical Financial
Measures |
|
|
|
|
|
|
Three months
ended |
Year
ended |
|
December 31, |
December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
|
(in
thousands) |
(in
thousands) |
|
|
|
|
|
Total revenues (a) |
$ 63,068 |
$ 59,314 |
$ 246,641 |
$ 242,606 |
Production based revenue consisting of
the |
|
|
|
|
total value of cemetery contracts
written, |
|
|
|
|
funeral home revenues and investment
and |
|
|
|
|
other income (b) |
86,209 |
73,383 |
326,600 |
296,323 |
|
|
|
|
|
Operating profit (a) |
1,928 |
1,602 |
6,383 |
13,841 |
Adjusted operating profit (b) |
20,584 |
11,861 |
67,204 |
53,837 |
|
|
|
|
|
Net loss (a) |
(3,539) |
(3,935) |
(19,032) |
(3,013) |
|
|
|
|
|
Operating cash flows (a) |
(1,819) |
1,099 |
35,077 |
31,896 |
Adjusted operating cash generated (b) |
20,437 |
11,434 |
81,939 |
55,028 |
Distributable free cash flow generated
(b) |
$ 18,967 |
$ 10,806 |
$ 76,004 |
$ 53,277 |
|
|
|
|
|
|
|
|
|
|
|
As
of |
As
of |
|
|
|
December 31,
2013 |
December 31,
2012 |
|
|
|
|
|
|
|
Distribution coverage quarters (b) |
7.80 |
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 |
Year
ended |
|
December 31, |
December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
(in
thousands) |
(in
thousands) |
|
|
|
|
|
GAAP operating profit |
$ 1,928 |
$ 1,602 |
$ 6,383 |
$ 13,841 |
|
|
|
|
|
Increase in applicable deferred
revenues |
23,141 |
14,069 |
79,959 |
53,717 |
|
|
|
|
|
Increase in deferred cost of goods sold
and selling and obtaining costs |
(4,485) |
(3,810) |
(19,138) |
(13,721) |
|
|
|
|
|
Adjusted operating profit |
$ 20,584 |
$ 11,861 |
$ 67,204 |
$ 53,837 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Production Based Revenue (non-GAAP) to Revenues
(GAAP) |
|
|
|
|
|
|
Three
months ended December 31, |
Increase |
Increase |
|
2013 |
2012 |
(Decrease)
($) |
(Decrease)
(%) |
|
(in
thousands) |
|
|
|
|
|
Value of pre-need cemetery contracts
written |
$ 32,474 |
$ 31,842 |
$ 632 |
2.0% |
Value of at-need cemetery contracts
written |
19,613 |
19,233 |
380 |
2.0% |
Investment income from trusts |
17,648 |
8,357 |
9,291 |
111.2% |
Interest income |
1,717 |
1,726 |
(9) |
-0.5% |
Funeral home revenues |
13,904 |
10,923 |
2,981 |
27.3% |
Other cemetery revenues |
853 |
1,302 |
(449) |
-34.5% |
|
|
|
|
|
Total production based revenues |
86,209 |
73,383 |
12,826 |
17.5% |
|
|
|
|
|
Less: |
|
|
|
|
Increase in deferred sales revenue and
investment income |
(23,141) |
(14,069) |
(9,072) |
64.5% |
|
|
|
|
|
Total GAAP revenues |
$ 63,068 |
$ 59,314 |
$ 3,754 |
6.3% |
|
|
|
|
|
|
Year
ended December 31, |
Increase |
Increase |
|
2013 |
2012 |
(Decrease)
($) |
(Decrease)
(%) |
|
(in
thousands) |
|
|
|
|
|
Value of pre-need cemetery contracts
written |
$ 134,857 |
$ 128,437 |
$ 6,420 |
5.0% |
Value of at-need cemetery contracts
written |
80,000 |
79,346 |
654 |
0.8% |
Investment income from trusts |
50,564 |
38,571 |
11,993 |
31.1% |
Interest income |
6,926 |
6,698 |
228 |
3.4% |
Funeral home revenues |
50,808 |
37,988 |
12,820 |
33.7% |
Other cemetery revenues |
3,445 |
5,283 |
(1,838) |
-34.8% |
|
|
|
|
|
Total production based revenues |
326,600 |
296,323 |
30,277 |
10.2% |
|
|
|
|
|
Less: |
|
|
|
|
Increase in deferred sales revenue and
investment income |
(79,959) |
(53,717) |
(26,242) |
48.9% |
|
|
|
|
|
Total GAAP revenues |
$ 246,641 |
$ 242,606 |
$ 4,035 |
1.7% |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Cash Flows (non-GAAP) and Distributable Free
Cash Flow (Non-GAAP) to Operating Cash Flows (GAAP) |
|
|
|
|
Three
months ended December 31, |
|
2013 |
2012 |
|
(in
thousands) |
|
|
|
GAAP operating cash flows |
$ (1,819) |
$ 1,099 |
|
|
|
Add: net cash inflows into the merchandise
trust |
13,208 |
3,629 |
Add net increase (decrease) in accounts
receivable |
6,778 |
3,142 |
Add: net decrease (increase) in merchandise
liabilities |
3,324 |
1,611 |
|
|
|
Deduct: net decrease in accounts
payable and accrued expenses |
752 |
(2,123) |
Other float related changes |
(1,806) |
4,076 |
|
|
|
Adjusted operating cash flow generated |
20,437 |
11,434 |
|
|
|
Less: maintenance capital expenditures |
(1,620) |
(1,553) |
Plus: growth capital expenditures
reclassified as operating expenses and deducted from adjusted
operating cash generated (a) |
150 |
925 |
|
|
|
Distributable free cash flow generated |
18,967 |
10,806 |
Cash on hand - beginning of the period |
19,984 |
8,128 |
|
|
|
Distributable cash available for the
period |
38,951 |
18,934 |
|
|
|
Partner distributions made |
$ 13,400 |
$ 12,007 |
|
(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. |
|
|
|
|
Year
ended December 31, |
|
2013 |
2012 |
|
(in
thousands) |
|
|
|
GAAP operating cash flows |
$ 35,077 |
$ 31,896 |
|
|
|
Add: net cash inflows into the merchandise
trust |
36,919 |
11,806 |
Add net increase (decrease) in accounts
receivable |
8,926 |
5,475 |
Add: net decrease (increase) in merchandise
liabilities |
3,861 |
7,260 |
|
|
|
Deduct: net decrease in accounts
payable and accrued expenses |
(7,588) |
(4,330) |
Other float related changes |
4,744 |
2,921 |
|
|
|
Adjusted operating cash flow generated |
81,939 |
55,028 |
|
|
|
Less: maintenance capital expenditures |
(6,986) |
(4,874) |
Plus: growth capital expenditures
reclassified as operating expenses and deducted from adjusted
operating cash generated (a) |
1,051 |
3,123 |
|
|
|
Distributable free cash flow generated |
76,004 |
53,277 |
Cash on hand - beginning of the period |
7,946 |
12,058 |
|
|
|
Distributable cash available for the
period |
83,950 |
65,335 |
|
|
|
Partner distributions made |
$ 52,053 |
$ 47,454 |
|
|
|
(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 |
|
December 31,
2013 |
December 31,
2012 |
|
(in
thousands) |
Partners' capital |
$ 107,520 |
$ 135,182 |
|
|
|
Deferred selling and obtaining costs |
(87,998) |
(76,317) |
Deferred cemetery revenues, net |
581,585 |
497,861 |
|
|
|
Production based partners' capital |
$ 601,107 |
$ 556,726 |
|
|
|
|
|
|
Selected Net
Assets |
|
|
|
|
As
of |
As
of |
|
December 31,
2013 |
December 31,
2012 |
|
(in
thousands) |
|
|
|
Selected assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 12,175 |
$ 7,946 |
Accounts receivable, net of allowance |
55,115 |
51,895 |
Long-term accounts receivable, net of
allowance |
78,356 |
71,521 |
Merchandise trusts, restricted, at fair
value |
431,556 |
375,973 |
|
|
|
Total selected assets |
577,202 |
507,335 |
|
|
|
Selected liabilities: |
|
|
|
|
|
Accounts payable and accrued liabilities |
37,269 |
28,973 |
Accrued interest |
1,512 |
1,833 |
Current portion, long-term debt |
2,916 |
2,175 |
Other long-term liabilities |
1,527 |
1,835 |
Long-term debt |
289,016 |
252,774 |
Deferred tax liabilities |
12,407 |
14,910 |
Merchandise liability |
127,806 |
125,869 |
|
|
|
Total selected liabilities |
472,453 |
428,369 |
|
|
|
Total selected net assets |
$ 104,749 |
$ 78,966 |
|
|
|
Distribution coverage quarters (a) |
7.80 |
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 (21,377,102 at December 31,
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. |
Consolidated Balance
Sheet |
(in
thousands) |
|
|
|
|
December 31, |
December 31, |
|
2013 |
2012 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 12,175 |
$ 7,946 |
Accounts receivable, net of
allowance |
55,115 |
51,895 |
Prepaid expenses |
3,622 |
3,832 |
Other current assets |
22,667 |
17,418 |
Total current
assets |
93,579 |
81,091 |
|
|
|
Long-term accounts receivable, net of
allowance |
78,356 |
71,521 |
Cemetery property |
316,469 |
309,980 |
Property and equipment, net of accumulated
depreciation |
85,007 |
79,740 |
Merchandise trusts, restricted, at fair
value |
431,556 |
375,973 |
Perpetual care trusts, restricted, at fair
value |
311,771 |
282,313 |
Deferred financing costs, net of accumulated
amortization |
8,308 |
9,238 |
Deferred selling and obtaining costs |
87,998 |
76,317 |
Deferred tax assets |
42 |
381 |
Goodwill |
48,034 |
42,392 |
Other assets |
12,209 |
14,779 |
Total assets |
$ 1,473,329 |
$ 1,343,725 |
|
|
|
Liabilities and partners'
capital |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
liabilities |
$ 37,269 |
$ 28,973 |
Accrued interest |
1,512 |
1,833 |
Current portion, long-term
debt |
2,916 |
2,175 |
Total current
liabilities |
41,697 |
32,981 |
|
|
|
Other long-term liabilities |
1,527 |
1,835 |
Long-term debt |
289,016 |
252,774 |
Deferred cemetery revenues, net |
581,585 |
497,861 |
Deferred tax liabilities |
12,407 |
14,910 |
Merchandise liability |
127,806 |
125,869 |
Perpetual care trust corpus |
311,771 |
282,313 |
Total liabilities |
1,365,809 |
1,208,543 |
|
|
|
Commitments and contingencies |
|
|
Partners' capital |
|
|
General partner |
(2,137) |
386 |
Common partners |
109,657 |
134,796 |
Total partners'
capital |
107,520 |
135,182 |
|
|
|
Total liabilities and partners' capital |
$ 1,473,329 |
$ 1,343,725 |
See accompanying notes to the Consolidated Financial Statements
on the Annual Report to be filed on Form 10-K for the year ended
December 31, 2013.
|
StoneMor Partners
L.P. |
Consolidated Statement
of Operations |
(in thousands, except
per unit data) |
|
|
|
|
|
|
Three months
ended |
Year
ended |
|
December 31, |
December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
(unaudited) |
|
|
Revenues: |
|
|
|
|
Cemetery |
|
|
|
|
Merchandise |
$ 27,087 |
$ 26,601 |
$ 110,673 |
$ 114,025 |
Services |
10,632 |
11,613 |
44,054 |
46,094 |
Investment and
other |
12,861 |
11,039 |
46,959 |
46,808 |
Funeral home |
|
|
|
|
Merchandise |
5,186 |
4,416 |
18,922 |
15,551 |
Services |
7,302 |
5,645 |
26,033 |
20,128 |
Total revenues |
63,068 |
59,314 |
246,641 |
242,606 |
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
Cost of goods sold (exclusive
of depreciation shown separately below): |
|
|
|
|
Perpetual
care |
1,457 |
1,317 |
5,656 |
5,715 |
Merchandise |
5,298 |
5,482 |
22,203 |
22,386 |
Cemetery expense |
14,866 |
13,591 |
57,566 |
55,410 |
Selling expense |
12,698 |
10,678 |
47,832 |
46,878 |
General and administrative
expense |
8,491 |
7,525 |
31,873 |
28,928 |
Corporate overhead (including
$332 and $291 in unit-based compensation for the three months
ended December 31, 2013 and 2012, and $1,370 and $916 for the
year ended December 31, 2013 and 2012, respectively) |
7,218 |
7,264 |
28,875 |
28,169 |
Depreciation and
amortization |
2,389 |
2,672 |
9,548 |
9,431 |
Funeral home expense |
|
|
|
|
Merchandise |
771 |
1,474 |
5,569 |
5,200 |
Services |
4,951 |
4,128 |
19,190 |
14,574 |
Other |
2,851 |
2,656 |
10,895 |
8,951 |
Acquisition related costs, net
of recoveries |
150 |
925 |
1,051 |
3,123 |
Total cost and
expenses |
61,140 |
57,712 |
240,258 |
228,765 |
|
|
|
|
|
Operating profit |
1,928 |
1,602 |
6,383 |
13,841 |
|
|
|
|
|
Gain on acquisitions |
-- |
-- |
2,530 |
122 |
Gain on termination of
operating agreement |
-- |
-- |
-- |
1,737 |
Gain on settlement agreement,
net |
-- |
-- |
12,261 |
-- |
Gain on sale of other
assets |
-- |
-- |
155 |
-- |
Loss on early extinguishment of
debt |
-- |
-- |
21,595 |
-- |
Interest expense |
5,282 |
5,394 |
21,070 |
20,503 |
|
|
|
|
|
Net loss before income taxes |
(3,354) |
(3,792) |
(21,336) |
(4,803) |
|
|
|
|
|
Income tax expense (benefit) |
185 |
143 |
(2,304) |
(1,790) |
|
|
|
|
|
Net loss |
$ (3,539) |
$ (3,935) |
$ (19,032) |
$ (3,013) |
|
|
|
|
|
General partner's interest in net loss for
the period |
$ (66) |
$ (79) |
$ (350) |
$ (60) |
Limited partners' interest in net loss for
the period |
$ (3,473) |
$ (3,856) |
$ (18,682) |
$ (2,953) |
|
|
|
|
|
Net loss per limited partner unit (basic and
diluted) |
$ (.16) |
$ (.20) |
$ (.89) |
$ (.15) |
|
|
|
|
|
Weighted average number of limited partners'
units outstanding (basic and diluted) |
21,368 |
19,544 |
20,954 |
19,445 |
|
|
|
|
|
Distributions declared per unit |
$ .600 |
$ .590 |
$ 2.385 |
$ 2.350 |
See accompanying notes to the Consolidated
Financial Statements on the Annual Report to be filed on Form 10-K
for the year ended December 31, 2013.
|
StoneMor Partners
L.P. |
Consolidated Statement
of Cash Flows |
(in
thousands) |
|
|
|
|
|
|
Three
months ended December 31, |
Year
ended December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
(unaudited) |
|
|
Operating activities: |
|
|
|
|
Net loss |
$ (3,539) |
$ (3,935) |
$ (19,032) |
$ (3,013) |
Adjustments to reconcile net
loss to net cash provided by (used in) operating
activities: |
|
|
|
|
Cost of lots
sold |
1,972 |
1,638 |
8,019 |
7,818 |
Depreciation and
amortization |
2,389 |
2,672 |
9,548 |
9,431 |
Unit-based
compensation |
332 |
291 |
1,370 |
916 |
Accretion of debt
discounts |
627 |
509 |
2,303 |
1,739 |
Gain on
termination of operating agreement |
-- |
-- |
-- |
(1,737) |
Gain on
acquisitions |
-- |
-- |
(2,530) |
(122) |
Gain on sale of
other assets |
-- |
-- |
(155) |
-- |
Loss on early
extinguishment of debt |
-- |
-- |
21,595 |
-- |
Changes in assets
and liabilities that provided (used) cash: |
|
|
|
|
Accounts receivable |
(6,778) |
(3,142) |
(8,926) |
(5,475) |
Allowance for doubtful accounts |
1,255 |
(2,533) |
92 |
1,210 |
Merchandise trust fund |
(13,208) |
(3,629) |
(36,919) |
(11,806) |
Prepaid expenses |
2,136 |
895 |
210 |
527 |
Other current assets |
(1,342) |
(1,821) |
(5,248) |
(2,165) |
Other assets |
(712) |
3 |
2,861 |
128 |
Accounts payable and accrued and other liabilities |
(752) |
2,123 |
7,588 |
4,330 |
Deferred selling and obtaining costs |
(2,797) |
(2,412) |
(11,681) |
(7,775) |
Deferred cemetery revenue |
21,527 |
12,108 |
72,708 |
47,548 |
Deferred taxes (net) |
395 |
(57) |
(2,865) |
(2,398) |
Merchandise liability |
(3,324) |
(1,611) |
(3,861) |
(7,260) |
Net cash provided by (used in) operating activities |
(1,819) |
1,099 |
35,077 |
31,896 |
Investing activities: |
|
|
|
|
|
|
|
|
|
Cash paid for cemetery
property |
(1,556) |
(1,681) |
(5,766) |
(7,098) |
Purchase of subsidiaries |
-- |
(2,300) |
(14,100) |
(27,976) |
Cash paid for property and
equipment |
(1,620) |
(1,553) |
(6,986) |
(4,874) |
Proceeds from sales of other
assets |
-- |
-- |
155 |
-- |
Net cash used in
investing activities |
(3,176) |
(5,534) |
(26,697) |
(39,948) |
Financing activities: |
|
|
|
|
Cash distributions |
(13,400) |
(12,007) |
(52,053) |
(47,454) |
Additional borrowings on
long-term debt |
32,500 |
20,500 |
269,502 |
84,000 |
Repayments of long-term
debt |
(21,896) |
(4,134) |
(239,932) |
(30,271) |
Proceeds from public
offering |
-- |
-- |
38,377 |
-- |
Proceeds from general partner
contributions |
-- |
-- |
-- |
89 |
Fees paid related to early
extinguishment of debt |
-- |
-- |
(14,920) |
-- |
Cost of financing
activities |
(18) |
(106) |
(5,125) |
(2,424) |
Net cash provided
by (used in) financing activities |
(2,814) |
4,253 |
(4,151) |
3,940 |
Net increase (decrease) in cash and
cash equivalents |
(7,809) |
(182) |
4,229 |
(4,112) |
Cash and cash equivalents - Beginning
of period |
19,984 |
8,128 |
7,946 |
12,058 |
Cash and cash equivalents - End of
period |
$ 12,175 |
$ 7,946 |
$ 12,175 |
$ 7,946 |
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
Cash paid during the period for
interest |
$ 8,151 |
$ 8,750 |
$ 18,907 |
$ 18,481 |
Cash paid during the period for
income taxes |
$ 576 |
$ 123 |
$ 3,891 |
$ 4,101 |
|
|
|
|
|
Non-cash investing and financing
activities: |
|
|
|
|
Acquisition of assets by
financing |
$ 83 |
$ 88 |
$ 190 |
$ 287 |
Issuance of limited partner
units for cemetery acquisition |
$ -- |
$ 650 |
$ 3,718 |
$ 4,753 |
Acquisition of assets by
assumption of directly related liability |
$ -- |
$ 421 |
$ 3,924 |
$ 2,469 |
See accompanying notes to the Consolidated
Financial Statements on the Annual Report to be filed on Form 10-K
for the year ended December 31, 2013.
CONTACT: John McNamara
(215) 826-2800
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