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MarketScreener Homepage  >  Equities  >  Nyse  >  StoneMor Partners L.P.    STON

STONEMOR PARTNERS L.P.

(STON)
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StoneMor Partners L.P. : Reports Financial Results for 2018 Second Quarter

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02/12/2019 | 07:01am EST

TREVOSE, Pa., Feb. 12, 2019 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE: STON) (“StoneMor” or the “Partnership”), a leading owner and operator of cemeteries and funeral homes, today reported financial results for the three and six month periods ended June 30, 2018. 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.

Joe Redling, StoneMor’s President and Chief Executive Officer, said, “The second quarter of 2018 generated stable year over year results in many of our key performance metrics such as interments performed, net interment rights sold and cemetery contracts written. As a reminder, our financial results for the period did not yet reflect the impact of our reorganization and cost reduction efforts, which we began in the second half of 2018, and, as we previously disclosed, will take time to deliver the full results we seek. The recently reported amendment to our credit facility and financing agreement are key components of the foundation for future success, and we expect to become current in our financial filings shortly. We believe the actions we’ve taken to reorganize the business, align expenses and put the company on a better financial foundation will support improvements in 2019.”

SECOND QUARTER AND SIX MONTH FINANCIAL PERFORMANCE

  • For the three months ended June 30, 2018, revenues were $81.6 million compared to $86.0 million in the prior year period. 2018 six-month revenues were $159.5 million compared to $168.9 million in the prior year period. Two factors were largely responsible for the unfavorable comparison. In the first half of 2017, revenues benefited from a large backlog of preneed cemetery merchandise that became available to be serviced and the adoption of ASC 606 in 2018 which resulted in a reduction associated with the deferral of revenue from document fees, combined with a decrease in land sales. 
     
  • Second quarter net loss was $17.0 million compared to $11.6 million in the prior year period.  Year-to-date net loss was $34.9 million compared to $20.1 million. The increased losses were driven largely by the unfavorable comparisons previously mentioned, increased expenses related to the adoption of ASC 606, advertising and employee benefits, as well as the continued impact of higher corporate overhead related to professional fees associated with delayed financial filings and legal costs.

  • As of June 30, 2018, year-to-date cash from operations was $15.4 million, largely equal to the prior year period.

  • Merchandise trust value at June 30, 2018 was $511.9 million compared to $515.5 million at December 31, 2017.
     
  • Deferred revenue at June 30, 2018 was $933.2 million compared to $912.6 million at December 31, 2017.

  • As of June 30, 2018, the Partnership had $15.0 million of cash and cash equivalents and $322.6 million of total debt, including $156.9 million outstanding under its revolving credit facility.

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 322 cemeteries and 90 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 operational improvements, are forward-looking statements. Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “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 our substantial secured and unsecured indebtedness, our ability to refinance our secured indebtedness in the near term, 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 and resume paying 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: the consequences of the Partnership’s delinquent filing of its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 (the “Delinquent Report”), 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 Delinquent Report is not filed within the period specified therein or the indenture governing its senior notes if the Partnership fails to file it 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 Delinquent Report within the period prescribed by the Partnership’s amended credit facility or within 120 days after notice from the trustee under 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; uncertainty associated with the consummation of the Partnership’s reorganization transactions; StoneMor’s ability to successfully implement its strategic plan relating to achieving operating improvements, including improving sales productivity and reducing operating expenses; 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 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.

CONTACT: John McNamara
  Director - Investor Relations
  StoneMor Partners L.P.
  (215) 826-2945



STONEMOR PARTNERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
    
 June 30, 2018 December 31, 2017
Assets   
Current assets:   
Cash and cash equivalents$14,979  $6,821 
Accounts receivable, net of allowance66,837  79,116 
Prepaid expenses9,180  4,580 
Assets held for sale1,343  1,016 
Other current assets17,930  21,453 
Total current assets110,269  112,986 
    
Long-term accounts receivable, net of allowance95,421  105,935 
Cemetery property335,037  333,404 
Property and equipment, net of accumulated depreciation113,229  114,090 
Merchandise trusts, restricted, at fair value511,852  515,456 
Perpetual care trusts, restricted, at fair value340,364  339,928 
Deferred selling and obtaining costs112,025  126,398 
Deferred tax assets92  84 
Goodwill24,862  24,862 
Intangible assets, net62,342  63,244 
Other assets25,161  19,695 
Total assets$1,730,654  $1,756,082 
    
Liabilities and Partners' Capital   
Current liabilities:   
Accounts payable and accrued liabilities$51,926  $43,023 
Accrued interest1,912  1,781 
Current portion, long-term debt2,139  1,002 
Total current liabilities55,977  45,806 
    
Long-term debt, net of deferred financing costs320,495  317,693 
Deferred revenues, net933,159  912,626 
Deferred tax liabilities6,623  9,638 
Perpetual care trust corpus340,364  339,928 
Other long-term liabilities43,464  38,695 
Total liabilities1,700,082  1,664,386 
Commitments and contingencies   
Partners' capital (deficit):   
General partner interest(3,615) (2,959)
Common limited partners' interest34,187  94,655 
Total partners' capital30,572  91,696 
Total liabilities and partners' capital$1,730,654  $1,756,082 
        

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.


STONEMOR PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per unit data)
    
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2018 2017 2018 2017
Revenues:       
Cemetery:       
Interments$20,789  $19,641  $40,414  $37,620 
Merchandise17,116  18,834  33,743  37,131 
Services17,737  18,619  34,228  35,132 
Investment and other12,038  13,652  21,538  26,390 
Funeral home:       
Merchandise6,522  6,749  13,951  14,585 
Services7,369  8,457  15,642  18,040 
Total revenues81,571  85,952  159,516  168,898 
        
Costs and Expenses:       
Cost of goods sold13,086  12,043  26,521  25,562 
Cemetery expense21,007  20,124  38,421  36,821 
Selling expense17,166  15,623  33,422  32,082 
General and administrative expense10,163  9,753  21,121  19,710 
Corporate overhead15,165  16,067  26,992  27,171 
Depreciation and amortization3,071  3,391  6,116  6,846 
Funeral home expenses:       
Merchandise1,108  1,623  3,586  3,383 
Services5,582  5,454  11,100  11,153 
Other3,961  4,987  9,001  10,332 
Total costs and expenses90,309  89,065  176,280  173,060 
        
Other losses  (1,071) (5,205) (1,071)
Interest expense(8,107) (6,741) (15,220) (13,447)
Loss before income taxes(16,845) (10,925) (37,189) (18,680)
Income tax benefit (expense)(172) (657) 2,249  (1,463)
Net loss$(17,017) $(11,582) $(34,940) $(20,143)
General partner's interest$(177) $(121) $(364) $(210)
Limited partners' interest$(16,840) $(11,461) $(34,576) $(19,933)
Net loss per limited partner unit (basic and diluted)$(0.44) $(0.30) $(0.91) $(0.53)
Weighted average number of limited partners' units outstanding (basic and diluted)37,958  37,957  37,958  37,938 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.


STONEMOR PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
  
 Six Months Ended June 30,
 2018 2017
Cash Flows From Operating Activities:   
Net loss$(34,940) $(20,143)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Cost of lots sold3,489  5,661 
Depreciation and amortization6,116  6,846 
Provision for bad debt1,644  2,682 
Non-cash compensation expense1,913  488 
Non-cash interest expense3,215  2,195 
Non-cash impairment charge and other losses5,205  872 
Changes in assets and liabilities:   
Accounts receivable, net of allowance1,195  (4,946)
Merchandise trust fund(4,181) 43,915 
Other assets(1,395) (3,125)
Deferred selling and obtaining costs(4,184) (6,287)
Deferred revenues, net33,599  (17,633)
Deferred taxes, net(2,649) 944 
Payables and other liabilities6,377  4,031 
Net cash provided by operating activities15,404  15,500 
Cash Flows From Investing Activities:   
Cash paid for capital expenditures(7,626) (3,311)
Cash paid for acquisitions(833)  
Proceeds from divestitures   451 
Proceeds from asset sales  401 
Net cash used in investing activities(8,459) (2,459)
Cash Flows From Financing Activities:   
Cash distributions  (24,545)
Proceeds from borrowings16,880  62,792 
Repayments of debt(12,896) (56,256)
Cost of financing activities(2,771) (776)
Net cash provided by (used in) financing activities1,213  (18,785)
Net increase (decrease) in cash and cash equivalents8,158  (5,744)
Cash and cash equivalents - Beginning of period6,821  12,570 
Cash and cash equivalents - End of period$14,979  $6,826 
Supplemental disclosure of cash flow information:   
Cash paid during the period for interest$12,865  $11,118 
Cash paid during the period for income taxes$709  $2,630 
Non-cash investing and financing activities:   
Acquisition of assets by financing$688  $1,384 
Classification of assets as held for sale$543  $1,169 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.


SUPPLEMENTAL OPERATING DATA
    
 Three Months Ended June 30, Six Months Ended June 30,
 2018 2017 2018 2017
Interments performed14,102  13,627  28,674  28,057 
Interment rights sold (1)       
Lots8,941  8,604  15,477  15,856 
Mausoleum crypts (including pre-construction)301  553  847  1,083 
Niches430  492  859  962 
Net interment rights sold (1)9,672  9,649  17,183  17,901 
        
Number of pre-need cemetery contracts written11,547  12,087  21,709  23,523 
Number of at-need cemetery contracts written15,276  15,575  30,003  30,859 
Number of cemetery contracts written26,823  27,662  51,712  54,382 
            

______________________________

  1. Net of cancellations. Sales of double-depth burial lots are counted as two sales.

stonemor.jpg

Source: StoneMor Partners L.P.

2019 GlobeNewswire, Inc., source Press Releases

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