StoneMor Partners L.P. Reports Financial Results for 2017 First Quarter
October 27 2017 - 4:03PM
StoneMor Partners L.P. (NYSE:STON)
(“StoneMor” or the “Partnership”) today announced
it has reported financial results for the three months ended
March 31, 2017. Investors are encouraged to read the
Partnership's quarterly report on Form 10-Q filed with the
Securities and Exchange Commission (the “SEC”), which contains
additional details, and can be found at www.stonemor.com.
Revenues were $82.9 million for the three months ended
March 31, 2017, an increase of $4.8 million over the prior
year period. The increase was primarily due to increases in
the sales of cemetery and funeral home merchandise and services
partially offset by a decrease in investment and other income.
Net loss was $8.6 million for the three months ended
March 31, 2017 compared to a net loss of $6.4 million for the
prior year period. The increased loss was driven largely by
increases in costs associated with serviced marker orders,
amortization of cemetery property as well as increases in selling
expenses associated with the increase in cemetery merchandise
revenues.
Net cash provided by operating activities was $12.4 million
during the three months ended March 31, 2017, an increase of
$7.2 million from $5.2 million during the prior year period,
primarily due to favorable working capital movements resulting from
larger withdrawals from the merchandise trust. These larger
withdrawals were the result of increased focus on constructive
delivery of pre-need merchandise. As of March 31, 2017,
the Partnership had $13.7 million of cash and cash equivalents and
$305.2 million of total debt, including $140.6 million outstanding
under its revolving credit facility.
The Partnership noted that it is continuing to work to complete
the delayed filing of its periodic reports with the SEC. Consistent
with the terms of its recently amended credit facility, the
Partnership anticipates filing its Form 10-Q for the quarter ended
June 30, 2017 no later than December 11, 2017, and its Form 10-Q
for the quarter ended September 30, 2017 within 45 days
thereafter. The Partnership now expects it will hold an
investor conference call in connection with the filing of its third
quarter 10-Q.
About StoneMor Partners L.P.
StoneMor Partners L.P., headquartered in Trevose, Pennsylvania,
is an owner and operator of cemeteries and funeral homes in the
United States, with 316 cemeteries and 94 funeral homes in 27
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 investors section, at http://www.stonemor.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements contained in this press release, including,
but not limited to, information regarding the expected timing of
filings, and the timing of its next investor call are
forward-looking statements. Generally, the words “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend (including,
but not limited to StoneMor’s intent to maintain or increase its
distributions),” “project,” “expect,” “predict” and similar
expressions identify these forward-looking statements. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management’s
current expectations and estimates. These statements are neither
promises nor guarantees and are made subject to certain risks and
uncertainties that could cause actual results to differ materially
from the results stated or implied in this press release.
StoneMor’s major risks are related to uncertainties associated with
the cash flow from pre-need and at-need sales, trusts and
financings, which may impact StoneMor’s ability to meet its
financial projections, service its debt, pay distributions, and
increase its distributions, as well as with StoneMor’s ability to
maintain an effective system of internal control over financial
reporting and disclosure controls and procedures.
StoneMor’s additional risks and uncertainties include, but are
not limited to, risks and uncertainties related to the following:
the consequences of the Partnership’s delinquent filing of its
Quarterly Reports on Form 10-Q for the fiscal quarters ended June
30, 2017 and September 30, 2017 (the “Form 10-Q Reports”),
including that the U.S. Securities and Exchange Commission could
institute an administrative proceeding seeking the revocation of
the registration of the Partnership’s common units under the
Exchange Act, and that the Partnership remains delinquent in its
required filings with the New York Stock Exchange (“NYSE”) and
could ultimately face the possible delisting of its common units
from the NYSE; the potential for defaults under the Partnership’s
amended credit facility if the Form 10-Q Reports are not filed
within specified periods or the indenture governing its senior
notes if the Partnership fails to file them within 120 days after
notice from the trustee under the indenture; the Partnership’s
ability to obtain relief from its creditors if it cannot file the
Form 10-Q Reports within the periods prescribed by the
Partnership’s amended credit facility or the indenture governing
its senior notes, the terms on which such relief might be granted
and any restrictions that might be imposed in connection with any
relief that might be obtained; uncertainties associated with future
revenue and revenue growth; uncertainties associated with the
integration or anticipated benefits of recent acquisitions or any
future acquisitions; StoneMor’s ability to complete and fund
additional acquisitions; the effect of economic downturns; the
impact of StoneMor’s significant leverage on its operating plans;
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 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 improvements, including
improving sales productivity and reversing negative trends in costs
of goods sold, certain expenses, cemetery billings and investment
income from trusts, strong cash flows, further deleveraging and
liquidity enhancement; StoneMor’s ability to successfully compete
in the cemetery and funeral home industry; litigation or legal
proceedings that could expose StoneMor to significant liabilities
and damage StoneMor’s reputation, including but not limited to
litigation and governmental investigations or proceedings arising
out of or related to accounting and financial reporting matters;
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, you should keep in
mind the risk factors and other cautionary statements set forth in
StoneMor’s Annual Report on Form 10-K and the other reports that
StoneMor files with the Securities and Exchange Commission, from
time to time. 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 it, whether as a result of new information, future events or
otherwise.
STONEMOR PARTNERS L.P. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(in thousands) |
|
|
March 31, 2017
|
|
December 31, 2016 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
13,723 |
|
|
$ |
12,570 |
|
Accounts
receivable, net of allowance |
76,430 |
|
|
77,253 |
|
Prepaid
expenses |
6,072 |
|
|
5,532 |
|
Other
current assets |
21,739 |
|
|
23,466 |
|
Total
current assets |
117,964 |
|
|
118,821 |
|
|
|
|
|
Long-term accounts
receivable, net of allowance |
98,879 |
|
|
98,886 |
|
Cemetery property |
335,290 |
|
|
337,315 |
|
Property and equipment,
net of accumulated depreciation |
116,906 |
|
|
118,281 |
|
Merchandise trusts,
restricted, at fair value |
523,858 |
|
|
507,079 |
|
Perpetual care trusts,
restricted, at fair value |
341,479 |
|
|
333,780 |
|
Deferred selling and
obtaining costs |
120,113 |
|
|
116,890 |
|
Deferred tax
assets |
64 |
|
|
64 |
|
Goodwill |
70,436 |
|
|
70,436 |
|
Intangible assets |
64,852 |
|
|
65,438 |
|
Other assets |
21,429 |
|
|
20,023 |
|
Total assets |
$ |
1,811,270 |
|
|
$ |
1,787,013 |
|
|
|
|
|
Liabilities and
Partners' Capital |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued liabilities |
$ |
39,035 |
|
|
$ |
35,547 |
|
Accrued
interest |
5,443 |
|
|
1,571 |
|
Current
portion, long-term debt |
1,617 |
|
|
1,775 |
|
Total
current liabilities |
46,095 |
|
|
38,893 |
|
|
|
|
|
Long-term debt, net of
deferred financing costs |
303,618 |
|
|
300,351 |
|
Deferred revenues |
891,356 |
|
|
866,633 |
|
Deferred tax
liabilities |
20,556 |
|
|
20,058 |
|
Perpetual care trust
corpus |
341,479 |
|
|
333,780 |
|
Other long-term
liabilities |
38,019 |
|
|
36,944 |
|
Total liabilities |
1,641,123 |
|
|
1,596,659 |
|
Commitments and
contingencies |
|
|
|
Partners' capital
(deficit): |
|
|
|
General
partner interest |
(2,135 |
) |
|
(1,914 |
) |
Common
limited partners' interest |
172,282 |
|
|
192,268 |
|
Total
partners' capital |
170,147 |
|
|
190,354 |
|
Total liabilities and
partners' capital |
$ |
1,811,270 |
|
|
$ |
1,787,013 |
|
|
See
accompanying notes to the Unaudited Condensed Consolidated
Financial Statements in the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017. |
|
STONEMOR PARTNERS L.P. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) |
(in thousands, except per unit
data) |
|
|
Three Months Ended March 31, |
|
2017
|
|
2016 |
|
|
|
(As restated)* |
Revenues: |
|
|
|
Cemetery: |
|
|
|
Merchandise |
$ |
38,003 |
|
|
$ |
33,690 |
|
Services |
14,949 |
|
|
13,719 |
|
Investment and other |
12,575 |
|
|
14,414 |
|
Funeral
home: |
|
|
|
Merchandise |
7,836 |
|
|
7,482 |
|
Services |
9,583 |
|
|
8,867 |
|
Total
revenues |
82,946 |
|
|
78,172 |
|
|
|
|
|
Costs and
Expenses: |
|
|
|
Cost of
goods sold |
13,519 |
|
|
10,720 |
|
Cemetery
expense |
16,697 |
|
|
15,856 |
|
Selling
expense |
16,459 |
|
|
14,733 |
|
General
and administrative expense |
9,957 |
|
|
9,204 |
|
Corporate
overhead |
11,104 |
|
|
10,311 |
|
Depreciation and amortization |
3,455 |
|
|
3,065 |
|
Funeral
home expenses: |
|
|
|
Merchandise |
1,760 |
|
|
2,149 |
|
Services |
5,699 |
|
|
6,455 |
|
Other |
5,345 |
|
|
5,140 |
|
Total
costs and expenses |
83,995 |
|
|
77,633 |
|
|
|
|
|
Other gains (losses),
net |
— |
|
|
(882 |
) |
Interest expense |
(6,706 |
) |
|
(5,790 |
) |
Loss from continuing
operations before income taxes |
(7,755 |
) |
|
(6,133 |
) |
Income tax expense |
(806 |
) |
|
(260 |
) |
Net loss |
$ |
(8,561 |
) |
|
$ |
(6,393 |
) |
General partner's
interest |
$ |
(89 |
) |
|
$ |
1,101 |
|
Limited partners'
interest |
$ |
(8,472 |
) |
|
$ |
(7,494 |
) |
Net loss per limited
partner unit (basic and diluted) |
$ |
(0.22 |
) |
|
$ |
(0.23 |
) |
Weighted average number
of limited partners' units outstanding (basic and diluted) |
37,918 |
|
|
32,539 |
|
|
*Refer to
Note 1 in Part I, Item 1 of the filed Form 10-Q for the
three months ended March 31, 2017 for further detail regarding
the restatement. |
|
See
accompanying notes to the Unaudited Condensed Consolidated
Financial Statements in the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017. |
|
STONEMOR PARTNERS L.P. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(in thousands) |
|
|
Three Months Ended March 31, |
|
2017
|
|
2016 |
|
|
|
(As restated)* |
Cash Flows From
Operating Activities: |
|
|
|
Net
loss |
$ |
(8,561 |
) |
|
$ |
(6,393 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Cost of
lots sold |
3,551 |
|
|
2,006 |
|
Depreciation and amortization |
3,455 |
|
|
3,065 |
|
Provision
for cancellations |
1,828 |
|
|
2,718 |
|
Non-cash
compensation expense |
241 |
|
|
407 |
|
Non-cash
interest expense |
1,085 |
|
|
757 |
|
Other
(gains) losses, net |
— |
|
|
882 |
|
Changes
in assets and liabilities: |
|
|
|
Accounts
receivable, net of allowance |
(1,284 |
) |
|
(3,945 |
) |
Merchandise trust fund |
(3,430 |
) |
|
(11,613 |
) |
Other
assets |
(809 |
) |
|
(2,469 |
) |
Deferred
selling and obtaining costs |
(3,223 |
) |
|
(3,220 |
) |
Deferred
revenues |
12,802 |
|
|
15,711 |
|
Deferred
taxes, net |
498 |
|
|
17 |
|
Payables
and other liabilities |
6,198 |
|
|
7,311 |
|
Net cash provided by operating activities |
12,351 |
|
|
5,234 |
|
Cash Flows From
Investing Activities: |
|
|
|
Cash paid
for capital expenditures |
(1,496 |
) |
|
(4,560 |
) |
Proceeds
from asset sales |
— |
|
|
138 |
|
Net cash used in investing activities |
(1,496 |
) |
|
(4,422 |
) |
Cash Flows From
Financing Activities: |
|
|
|
Cash
distributions |
(11,887 |
) |
|
(21,387 |
) |
Proceeds
from borrowings |
24,000 |
|
|
10,500 |
|
Repayments of debt |
(21,072 |
) |
|
(10,355 |
) |
Proceeds
from issuance of common units, net of costs |
— |
|
|
18,763 |
|
Cost of
financing activities |
(743 |
) |
|
— |
|
Net cash used in financing activities |
(9,702 |
) |
|
(2,479 |
) |
Net increase
(decrease) in cash and cash equivalents |
1,153 |
|
|
(1,667 |
) |
Cash and cash
equivalents - Beginning of period |
12,570 |
|
|
15,153 |
|
Cash and cash
equivalents - End of period |
$ |
13,723 |
|
|
$ |
13,486 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid
during the period for interest |
$ |
1,802 |
|
|
$ |
1,513 |
|
Cash paid
during the period for income taxes |
$ |
2,371 |
|
|
$ |
376 |
|
Non-cash
investing and financing activities: |
|
|
|
Acquisition of assets by financing |
$ |
652 |
|
|
$ |
56 |
|
|
*Refer to
Note 1 in Part I, Item 1 of the filed Form 10-Q for the
three months ended March 31, 2017 for further detail regarding
the restatement. |
|
See
accompanying notes to the Unaudited Condensed Consolidated
Financial Statements in the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017. |
|
|
|
|
|
CONTACT: |
|
John McNamara |
|
|
|
Director - Investor
Relations |
|
|
|
StoneMor Partners
L.P. |
|
|
|
(215) 826-2945 |
|
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