StoneMor Partners L.P. Announces Fourth Quarter And 2012 Year End Results

LEVITTOWN, Pa., March 15, 2013 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE:STON) announced its results of operations for the three months and year ended December 31, 2012. 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.

Yearly Financial Highlights
  • Revenues (GAAP) improved from $228.4 million in 2011 to $242.6 million in 2012, a 6% increase.  
  • Production based revenue (non-GAAP) increased from $280.6 million in 2011 to $296.3 million in 2012, a 6% increase.   
  • Operating profits (GAAP) increased 41% to $13.8 million in 2012 as compared to $9.8 million in the 2011 year.     
  • Adjusted operating profits (non-GAAP) increased 11% to $53.8 million in 2012 from $48.6 million in 2011.   
  • Operating cash flows (GAAP) provided in the 12 months ended December 31, 2012 increased to $31.9 million from $5.5 million provided by operations in 2011, a 480% increase.     
  • Distributable free cash flow (non-GAAP) for 2012 was $53.3 million compared to $49.3 million for the same period last year, an 8% increase.                                                             
  • Distributable cash available during the period (non-GAAP) exceeded distributions by $17.9 million for the year ended December 31, 2012, versus $12.2 million in 2011, a 47% increase.  
  • Net loss (GAAP) narrowed 69% to $3.0 million from a net loss of $9.7 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.

"This was another very good year for StoneMor," said Lawrence Miller, President and Chief Executive Officer. "On a year over year basis, we showed positive returns on virtually every financial metric we use to measure the health and growth of the business.

"When looking at our quarterly comparisons, I'd like to discuss one element that we believe is important to consider. Our merchandise trust and perpetual care investment funds are managed by professional investment advisors. These advisors will realize gains when appropriate in accordance with pre-established portfolio management guidelines. In December 2012, our advisors realized $5 million less in gains than in 2011, and 100% of this $5 million directly impacted both production based revenues and adjusted operating profit.  It was not a portfolio performance or an operating issue – it was a timing issue."

Quarterly Financial Highlights
  • Revenues (GAAP) for the three month period ended December 31, 2012 were $59.3 million as compared to $58.7 million for the prior year period, a 1% increase.   
  • Production based revenue (non-GAAP) for the three month period ended December 31, 2012 declined 3% to $73.4 million from $75.9 million in the prior year period.  
  • For the three month period ended December 31, 2012, operating profit (GAAP) increased 86% to $1.6 million, versus $0.8 million in the prior year period.  
  • For the three month period ended December 31, 2012, adjusted operating profits (non-GAAP) declined 16% to $11.9 million as compared to $14.2 million in the prior year period.  
  • For the three month period ended December 31, 2012, cash flows provided by operations (GAAP) were $1.1 million, versus $5.6 million used in operations in same period last year.  
  • For the three months ending December 31, 2012 distributable free cash flow (non-GAAP) declined 26% to $10.8 million from $14.6 million in the prior year period.  
  • For the three months ended December 31, 2012, net loss of $3.9 million increased 26% from the loss of $3.1 million reported in the same three month period of 2011.

"I would like to reiterate that we performed well during yet another year in which the economic background was uncertain. Our quarterly comparisons were impacted mostly by the time period when we recognized investment income. Had we taken the same amount of gains in the fourth quarter of 2012 as we did in 2011, all these quarterly comparisons would have been positive.

"We raised our distribution earlier in the year. We have strengthened our balance sheet while continuing to make high quality acquisitions. Our entry into the strategically important Florida market was one of our great successes this year and we will continue to evaluate opportunities as they present themselves.

"We are very excited about our prospects based on our actions to date and the nature of our business. I would like to thank our employees for all their hard work in making this possible, and our unitholders for their support."

Investor Conference Call and Webcast

StoneMor will conduct a conference call to discuss the 2012 results today, Friday, March 15, 2013 at 11:00 a.m. Eastern Time. The conference call can be accessed by calling (800) 630-4153. An audio replay of the conference call will be available by calling (800) 633-8284 through 1:00 p.m. Eastern Time on March 29, 2013. The reservation number for the audio replay is as follows: 21650516. 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 276 cemeteries and 92 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 Investor Relations 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 the current economic downturn; 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; our ability to maintain effective disclosure controls and procedures and internal control over financial reporting; the effect of cybersecurity 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 Quarterly Reports on Form 10-Q filed with the SEC. Except as required by federal and state securities laws, we assume no obligation to publicly 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) 
                 
  Year ended  Year ended     
  December 31, 2012 December 31, 2011    
  (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  $ 128,437  $ (31,437)  $ 97,000  $ 122,789  $ (31,735)  $ 91,054  $ 5,946 6.5%
At-need cemetery revenues  79,346  (4,552)  74,794  79,501  (5,141)  74,360  434 0.6%
Investment income from trusts  38,571  (14,446)  24,125  38,943  (15,399)  23,544  581 2.5%
Interest income  6,698  --  6,698  5,864  --  5,864  834 14.2%
Funeral home revenues  37,988  (2,309)  35,679  31,163  (759)  30,404  5,275 17.3%
Other cemetery revenues  5,283  (973)  4,310  2,380  782  3,162  1,148 36.3%
                 
Total revenues  296,323  (53,717)  242,606  280,640  (52,252)  228,388  14,218 6.2%
                 
Costs and expenses                
                 
Cost of goods sold  33,807  (5,706)  28,101  31,154  (5,039)  26,115  1,986 7.6%
Cemetery expense  55,410  --  55,410  57,145  --  57,145  (1,735) -3.0%
Selling expense  54,641  (7,763)  46,878  53,784  (8,493)  45,291  1,587 3.5%
General and administrative expense  28,928  --  28,928  29,547  (3)  29,544  (616) -2.1%
Corporate overhead  28,169  --  28,169  23,766  --  23,766  4,403 18.5%
Depreciation and amortization  9,431  --  9,431  8,534  --  8,534  897 10.5%
Funeral home expense  28,977  (252)  28,725  23,554  --  23,554  5,171 22.0%
Acquisition related costs  3,123  --  3,123  4,604  --  4,604  (1,481) -32.2%
                 
Total costs and expenses  242,486  (13,721)  228,765  232,088  (13,535)  218,553  10,212 4.7%
                 
Operating profit  $ 53,837  $ (39,996)  $ 13,841  $ 48,552  $ (38,717)  $ 9,835  $ 4,006 40.7%
                 
  Three months ended Three months ended    
  December 31, 2012 December 31, 2011    
  (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  $ 31,842  $ (8,501)  $ 23,341  $ 32,336  $ (10,422)  $ 21,914  $ 1,427 6.5%
At-need cemetery revenues  19,233  (1,354)  17,879  19,731  (935)  18,796  (917) -4.9%
Investment income from trusts  8,357  (1,515)  6,842  13,361  (5,802)  7,559  (717) -9.5%
Interest income  1,726  --  1,726  1,284  --  1,284  442 34.4%
Funeral home revenues  10,923  (862)  10,061  8,406  (196)  8,210  1,851 22.5%
Other cemetery revenues  1,302  (1,837)  (535)  750  212  962  (1,497) -155.6%
                 
Total revenues  73,383  (14,069)  59,314  75,868  (17,143)  58,725  589 1.0%
                 
Costs and expenses                
                 
Cost of goods sold  8,344  (1,545)  6,799  8,003  (1,256)  6,747  52 0.8%
Cemetery expense  13,591  --  13,591  14,285  --  14,285  (694) -4.9%
Selling expense  12,872  (2,194)  10,678  13,885  (2,518)  11,367  (689) -6.1%
General and administrative expense  7,525  --  7,525  8,975  --  8,975  (1,450) -16.2%
Corporate overhead  7,264  --  7,264  6,194  --  6,194  1,070 17.3%
Depreciation and amortization  2,672  --  2,672  2,160  --  2,160  512 23.7%
Funeral home expense  8,329  (71)  8,258  6,679  --  6,679  1,579 23.6%
Acquisition related costs  925  --  925  1,457  --  1,457  (532) -36.5%
                 
Total costs and expenses  61,522  (3,810)  57,712  61,638  (3,774)  57,864  (152) -0.3%
                 
Operating profit  $ 11,861  $ (10,259)  $ 1,602  $ 14,230  $ (13,369)  $ 861  $ 741 86.1%

The tables above analyze our results of operation and the changes therein for the three and twelve months ended December 31, 2012, 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
         
  Year ended Three months ended
  December 31, December 31,
  2012 2011 2012 2011
         
  (In thousands) (In thousands)
         
Total revenues (a)  $ 242,606  $ 228,388  $ 59,314  $ 58,725
Production based revenue consisting of the total value of cemetery contracts written, funeral home revenues and investment and other income (b)  296,323  280,640  73,383  75,868
         
Operating profit (a)  13,841  9,835  1,602  861
Adjusted operating profit (b)  53,837  48,552  11,861  14,230
         
Net income (loss) (a)  (3,013)  (9,715)  (3,935)  (3,093)
         
Operating cash flows (a)  31,896  5,466  1,099  (5,603)
Adjusted operating cash generated (b)  55,028  50,698  11,434  14,605
Distributable free cash flow generated (b)  $ 53,277  $ 49,262  $ 10,806  $ 14,623
         
         
  As of As of    
  December 31, 2012 December 31, 2011    
         
Distribution coverage quarters (b)  6.57  8.63    
         
         
(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)
         
  Year ended December 31, Three months ended December 31,
  2012 2011 2012 2011
  (In thousands) (In thousands)
         
GAAP operating profit   $ 13,841  $ 9,835  $ 1,602  $ 861
         
Increase in applicable deferred revenues  53,717 52,252 14,069 17,143
         
Increase in deferred cost of goods sold and selling and obtaining costs (13,721) (13,535) (3,810) (3,774)
         
Adjusted operating profit  $ 53,837  $ 48,552  $ 11,861  $ 14,230
 
Reconciliation of Production Based Revenue (non-GAAP) to Revenues (GAAP)
         
  Year ended December 31, Increase Increase
  2012 2011 (Decrease) ($) (Decrease) (%)
  (In thousands)
         
Value of pre-need cemetery contracts written  $ 128,437  $ 122,789  $ 5,648 4.6%
Value of at-need cemetery contracts written  79,346  79,501  (155) -0.2%
Investment income from trusts  38,571  38,943  (372) -1.0%
Interest income  6,698  5,864  834 14.2%
Funeral home revenues  37,988  31,163  6,825 21.9%
Other cemetery revenues  5,283  2,380  2,903 122.0%
         
Total production based revenues  $ 296,323  $ 280,640  $ 15,683 5.6%
         
Less:        
Increase in deferred sales revenue and investment income  (53,717)  (52,252)  (1,465) 2.8%
         
Total GAAP revenues  $ 242,606  $ 228,388  $ 14,218 6.2%
         
  Three months ended December 31, Increase Increase
  2012 2011 (Decrease) ($) (Decrease) (%)
  (In thousands)
         
Value of pre-need cemetery contracts written  $ 31,842  $ 32,336  $ (494) -1.5%
Value of at-need cemetery contracts written  19,233  19,731  (498) -2.5%
Investment income from trusts  8,357  13,361  (5,004) -37.5%
Interest income  1,726  1,284  442 34.4%
Funeral home revenues  10,923  8,406  2,517 29.9%
Other cemetery revenues  1,302  750  552 73.6%
         
Total production based revenues  $ 73,383  $ 75,868  $ (2,485) -3.3%
         
Less:        
Increase in deferred sales revenue and investment income  (14,069)  (17,143)  3,074 -17.9%
         
Total GAAP revenues  $ 59,314  $ 58,725  $ 589 1.0%
 
Reconciliation of Adjusted Operating Cash Flows (non-GAAP) and Distributable Free Cash Flow (Non-GAAP) to Operating Cash Flows (GAAP)
     
  Year ended December 31,
  2012 2011
  (In thousands)
     
GAAP operating cash flows  $ 31,896  $ 5,466
     
Add: net cash inflows into the merchandise trust  11,806  23,889
Deduct: net decrease in accounts receivable  5,475  9,241
Add: net decrease in merchandise liabilities  7,260  5,669
     
Deduct: net (increase) decrease in accounts payable and accrued expenses  (4,330)  (868)
Other float related changes  2,921  7,301
     
Adjusted operating cash flow generated  55,028  50,698
     
Less: maintenance capital expenditures  (4,874)  (6,040)
Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a)  3,123  4,604
     
Distributable free cash flow generated  53,277  49,262
Cash on hand - beginning of the period  12,058  7,535
     
Distributable cash available for the period  65,335  56,797
     
Partner distributions made  $ 47,454  $ 44,605
     
     
(a) We maintain a line of credit 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.
     
  Three months ended December 31,
  2012 2011
  (In thousands)
     
GAAP operating cash flows  $ 1,099  $ (5,603)
     
Add: net cash inflows into the merchandise trust  3,629  12,208
Deduct: net decrease in accounts receivable  3,142  3,732
Add: net decrease in merchandise liabilities  1,611  3,384
     
Deduct: net (increase) decrease in accounts payable and accrued expenses  (2,123)  (2,158)
Other float related changes  4,076  3,042
     
Adjusted operating cash flow generated  11,434  14,605
     
Less: maintenance capital expenditures  (1,553)  (1,439)
Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a)  925  1,457
     
Distributable free cash flow generated  10,806  14,623
Cash on hand - beginning of the period  8,128  20,135
     
Distributable cash available for the period  18,934  34,758
     
Partner distributions made  $ 12,007  $ 11,778
     
     
(a) We maintain a line of credit 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 December 31,
  2012 2011
     
Partners' Capital  $ 135,182  $ 180,279
     
Deferred selling and obtaining costs  (76,317)  (68,542)
Deferred cemetery revenues, net  497,861  441,678
     
Production based partners' capital  $ 556,726  $ 553,415
     
Selected Net Assets
  As of As of
  December 31, 2012 December 31, 2011
  (In thousands)
     
Selected assets:    
     
Cash and cash equivalents  $ 7,946  $ 12,058
Accounts receivable, net of allowance  51,895  48,837
Long-term accounts receivable, net of allowance  71,521  68,419
Merchandise trusts, restricted, at fair value  375,973  344,515
     
Total selected assets  507,335  473,829
     
Selected liabilities:    
     
Accounts payable and accrued liabilities  28,973  26,428
Accrued interest  1,833  1,632
Current portion, long-term debt  2,175  1,487
Other long-term liabilities  1,835  2,830
Long-term debt  252,774  193,835
Deferred tax liabilities  14,910  16,968
Merchandise liability  125,869  128,942
     
Total selected liabilities  428,369  372,122
     
Total selected net assets  $ 78,966  $ 101,707
     
Distribution coverage quarters (a) 6.57 8.63
     
     
(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 (19,568,448 at December 31, 2012 and 19,368,261 at December 31, 2011, 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,
  2012 2011
Assets    
Current assets:    
Cash and cash equivalents $ 7,946 $ 12,058
Accounts receivable, net of allowance 51,895 48,837
Prepaid expenses 3,832 4,266
Other current assets 17,418 16,670
Total current assets 81,091 81,831
     
Long-term accounts receivable, net of allowance 71,521 68,419
Cemetery property 309,980 298,938
Property and equipment, net of accumulated depreciation 79,740 73,777
Merchandise trusts, restricted, at fair value 375,973 344,515
Perpetual care trusts, restricted, at fair value 282,313 254,679
Deferred financing costs, net of accumulated amortization 9,238 8,817
Deferred selling and obtaining costs 76,317 68,542
Deferred tax assets 381 415
Goodwill 42,392 32,145
Other assets 14,779 16,680
Total assets $ 1,343,725 $ 1,248,758
     
Liabilities and partners' capital    
Current liabilities:    
Accounts payable and accrued liabilities $ 28,973 $ 26,428
Accrued interest 1,833 1,632
Current portion, long-term debt 2,175 1,487
Total current liabilities 32,981 29,547
     
Other long-term liabilities 1,835 2,830
Long-term debt 252,774 193,835
Deferred cemetery revenues, net 497,861 441,678
Deferred tax liabilities 14,910 16,968
Merchandise liability 125,869 128,942
Perpetual care trust corpus 282,313 254,679
Total liabilities 1,208,543 1,068,479
     
Commitments and contingencies    
     
Partners' capital    
General partner 386 2,192
Common partners 134,796 178,087
Total partners' capital 135,182 180,279
     
Total liabilities and partners' capital $ 1,343,725 $ 1,248,758

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, 2012.
StoneMor Partners L.P.
Consolidated Statement of Operations
(In thousands, except unit data)
         
  Three months ended December 31, Year ended December 31,
  2012 2011 2012 2011
  (Unaudited)  
Revenues:        
Cemetery        
Merchandise $ 26,601 $ 26,811 $ 114,025 $ 108,088
Services  11,613  11,298  46,094  46,995
Investment and other  11,039  12,406  46,808  42,901
Funeral home        
Merchandise 4,416 3,673 15,551 12,810
Services 5,645 4,537 20,128 17,594
Total revenues 59,314 58,725 242,606 228,388
         
Costs and Expenses:        
Cost of goods sold (exclusive of depreciation shown separately below):        
Perpetual care 1,317 1,630 5,715 5,727
Merchandise 5,482 5,116 22,386 20,388
Cemetery expense 13,591 14,285 55,410 57,145
Selling expense 10,678 11,368 46,878 45,291
General and administrative expense 7,525 8,975 28,928 29,544
Corporate overhead (including $291 and $197 in unit-based compensation for        
the three months ended December 31, 2012 and 2011, and $916 and $773        
for the year ended December 31, 2012 and 2011, respectively) 7,264 6,194 28,169 23,766
Depreciation and amortization 2,672 2,160 9,431 8,534
Funeral home expense        
Merchandise 1,474 1,276 5,200 4,473
Services 4,128 3,261 14,574 11,717
Other 2,656 2,142 8,951 7,364
Acquisition related costs 925 1,457 3,123 4,604
Total cost and expenses 57,712 57,864 228,765 218,553
         
Operating profit 1,602 861 13,841 9,835
         
Expenses related to refinancing -- -- -- 453
Gain on termination of operating agreement -- -- 1,737 --
Gain on acquisition -- -- 122 --
Early extinguishment of debt -- -- -- 4,010
Gain on sale of funeral home -- 92 -- 92
Interest expense 5,394 4,932 20,503 19,198
         
Loss before income taxes (3,792) (3,979) (4,803) (13,734)
         
Income tax expense (benefit)        
State  196 128 420 (701)
Federal (53) (1,014) (2,210) (3,318)
Total income tax expense (benefit) 143 (886) (1,790) (4,019)
         
Net loss  $ (3,935)  $ (3,093)  $ (3,013)  $ (9,715)
         
General partner's interest in net loss for the period $ (79) $ (62) $ (60) $ (194)
Limited partners' interest in net loss for the period $ (3,856) $ (3,031) $ (2,953) $ (9,521)
         
Net loss per limited partner unit (basic and diluted) $ (.20) $ (.16) $ (.15) $ (.50)
         
Weighted average number of limited partners' units outstanding (basic and diluted) 19,544 19,364 19,445 18,947
         
Distributions declared per unit $ .590 $ .585 $ 2.35 $ 2.34

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, 2012.

 

StoneMor Partners L.P.
Consolidated Statement of Cash Flows
(In thousands)
         
  Three months ended December 31, Year ended December 31,
  2012 2011 2012 2011
  (Unaudited)  
Operating activities:        
Net loss $ (3,935) $ (3,093) $ (3,013) $ (9,715)
Adjustments to reconcile net loss to net cash provided by        
operating activities:        
Cost of lots sold 1,638 1,660 7,818 6,664
Depreciation and amortization 2,672 2,160 9,431 8,534
Unit-based compensation 291 197 916 773
Accretion of debt discount 509 404 1,739 1,354
Write-off of deferred financing fees -- -- -- 453
Gain on sale of funeral home -- (92) -- (92)
Gain on acquisitions -- -- (122) --
Gain on termination of operating agreement -- -- (1,737) --
Fees paid related to early extinguishment of debt -- -- -- 4,010
Changes in assets and liabilities that provided (used) cash:        
Accounts receivable (3,142) (3,732) (5,475) (9,241)
Allowance for doubtful accounts (2,533) (1,380) 1,210 2,217
Merchandise trust fund (3,629) (12,208) (11,806) (23,889)
Prepaid expenses 895 687 527 1,273
Other current assets (1,821) (1,331) (2,165) (7,355)
Other assets 3 47 128 291
Accounts payable and accrued and other liabilities 2,123 2,158 4,330 868
Deferred selling and obtaining costs (2,412) (2,722) (7,775) (9,120)
Deferred cemetery revenue 12,108 16,038 47,548 47,598
Deferred taxes (net) (57) (1,012) (2,398) (3,488)
Merchandise liability (1,611) (3,384) (7,260) (5,669)
Net cash provided by (used in) operating activities 1,099 (5,603) 31,896 5,466
Investing activities:        
         
Cash paid for cemetery property (1,681) (2,868) (7,098) (7,126)
Purchase of subsidiaries (2,300) (5,842) (27,976) (16,142)
Proceeds from divestiture of funeral home -- 122 -- 122
Cash paid for property and equipment (1,553) (1,439) (4,874) (6,040)
Net cash used in investing activities (5,534) (10,027) (39,948) (29,186)
Financing activities:        
Cash distribution (12,007) (11,778) (47,454) (44,605)
Additional borrowings on long-term debt 20,500 20,250 84,000 48,050
Repayments of long-term debt (4,134) (694) (30,271) (75,184)
Proceeds from public offering -- -- -- 103,207
Proceeds from general partner contribution -- 16 89 2,262
Fees paid related to early extinguishment of debt -- -- -- (4,010)
Cost of financing activities (106) (241) (2,424) (1,477)
Net cash provided by financing activities 4,253 7,553 3,940 28,243
Net increase (decrease) in cash and cash equivalents (182) (8,077) (4,112) 4,523
Cash and cash equivalents - Beginning of period 8,128 20,135 12,058 7,535
Cash and cash equivalents - End of period $ 7,946 $ 12,058 $ 7,946 $ 12,058
         
Supplemental disclosure of cash flow information        
Cash paid during the period for interest  $ 8,750  $ 8,233  $ 18,481  $ 18,130
Cash paid during the period for income taxes  $ 123  $ 210  $ 4,101  $ 2,452
         
Non-cash investing and financing activities        
Acquisition of assets by financing  $ 88  $ 57  $ 287  $ 294
Issuance of limited partner units for cemetery acquisition  $ 650  $ --  $ 4,753  $ 264
Acquisition of assets by assumption of directly related liability  $ 421  $ --  $ 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, 2012.
CONTACT: John McNamara         (215) 826-2800

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