Stewart Enterprises, Inc. (Nasdaq NMS: STEIE) reported today its
results for the first quarter of fiscal 2006, with increases in
earnings and cash flow compared to the first quarter of fiscal
2005. For the quarter ended January 31, 2006, the Company reported
net earnings of $8.4 million, or $.08 per diluted share, compared
to a net loss of $145.3 million, or $1.33 per diluted share, for
the first quarter of fiscal 2005. The first quarters of 2006 and
2005 were affected by the items reflected in the reconciliation
below. After adjusting the first quarters of 2006 and 2005 for
these items, the Company's adjusted earnings from continuing
operations would have been $10.0 million, or $.09 per diluted
share, in the first quarter of 2006 compared to $8.3 million, or
$.08 per diluted share, in the first quarter of 2005. Kenneth C.
Budde, Chief Executive Officer, stated, "We have achieved solid
results during the first quarter of fiscal 2006, including
increases in cash flow, gross profit and earnings. We experienced
increases in the number of same-store funeral calls, the average
revenue per same-store funeral call, and preneed sales, each of
which represents an integral part of our long-term business
strategy for organic growth. We also experienced a significant
reduction in interest expense. Including the Louisiana properties
affected by Hurricane Katrina, we achieved an increase in the
number of services performed by our same-store funeral businesses
of 2.4 percent, an increase in our cemetery property sales of 10
percent, and an increase in our preneed funeral sales of 9 percent
during the first quarter of 2006 compared to the first quarter of
2005. These results exceeded our 2006 goal to grow same-store
funeral calls up to 2 percent and are at the high end of our 2006
goal to grow preneed property and funeral sales by 5 to 10 percent.
We believe that these strong results reflect the successful
execution of our strategic plan, which focuses on putting people
first, -- customers and employees -- expanding our product and
service offerings to the cremation consumer, and marketing
additional products and services to our existing customer-base.
Additionally, we believe that our funeral home incentive
compensation program, which was implemented during the first
quarter of last year, continues to foster a sense of ownership in
our funeral homes." A reconciliation of the Company's net earnings
(loss) to adjusted earnings from continuing operations is provided
in the following table. The Company believes that adjusted earnings
from continuing operations is a useful measure for providing
additional insight into the Company's operating performance as it
eliminates the effects of certain items that are not comparable
from one period to the next. -0- *T Adjusted Earnings from
Continuing Operations (reconciliation of non-GAAP financial
measure) (all items are net of income taxes) Three Months Ended
------------------ January 31, ----------- 2006 2005 ---- ----
millions per share millions per share --------- --------- ---------
--------- Consolidated net earnings (loss) $ 8.4 $ 0.08 $ (145.3) $
(1.33) Subtract: Earnings from discontinued operations -- -- (0.5)
-- Add: Cumulative effect of change in accounting principle for
preneed selling costs -- -- 153.2 1.40
--------------------------------------- Earnings from continuing
operations $ 8.4 $ 0.08 $ 7.4 $ 0.07 Add: Stock option expense 0.3
-- -- -- Add: Hurricane related charges, net 1.6 0.01 -- --
Subtract: Gains on dispositions, net of impairment losses (0.3) --
(0.8) (0.01) Add: Loss on early extinguishment of debt -- -- 1.7
0.02 --------------------------------------- Adjusted earnings from
continuing operations $ 10.0 $ 0.09 $ 8.3 $ 0.08
======================================= *T Revenue from continuing
operations increased $4.1 million for the first quarter of fiscal
2006 compared to the first quarter of fiscal 2005. Funeral revenue
increased $2.1 million to $71.8 million, due primarily to the
increase in the number of families served by same-store funeral
homes during the first quarter and an increase in the average
revenue per funeral service performed. Cemetery revenue increased
$2.0 million to $54.8 million for the first quarter of 2006. The
increase in cemetery revenue was due primarily to an increase in
cemetery property sales and an increase in perpetual care trust
earnings, which was partially offset by a decrease in revenue
associated with the construction of cemetery projects during the
quarter. Revenue related to cemetery property prior to its
construction is recognized on a percentage of completion method of
accounting as construction occurs. Excluding the three Louisiana
funeral homes affected by Hurricane Katrina, the Company's
same-store funeral operations achieved an increase in the number of
families served of 3.3 percent, an increase in average revenue per
traditional funeral service of 4.4 percent and an increase in the
average revenue per cremation service of 0.9 percent for the first
quarter of fiscal 2006. The increase in the average revenue per
traditional funeral service was offset by an increase in the
proportion of lower-priced non-traditional funeral services,
including cremations, which experienced a smaller increase in
average revenue than the traditional services, resulting in an
overall increase in the average revenue per funeral service for the
quarter of 1.7 percent. Including the Louisiana funeral homes, the
Company's same-store funeral operations achieved an increase in the
number of families served of 2.4 percent, an increase in average
revenue per traditional funeral service of 4.1 percent and an
increase in the average revenue per cremation service of 0.2
percent for the first quarter of fiscal 2006. The increase in the
average revenue per traditional funeral service was offset by an
increase in the proportion of lower-priced non-traditional funeral
services, including cremations, which experienced a smaller
increase in average revenue than the traditional services,
resulting in an overall increase in the average revenue per funeral
service for the quarter of 1.3 percent. Total gross profit
increased $1.9 million in the first quarter of fiscal 2006 to $29.1
million, driven by an increase in cemetery gross profit resulting
from the increase in cemetery revenue described above. Funeral
gross profit remained flat at $17.8 million in the first quarter of
fiscal 2006 when compared to the first quarter of fiscal 2005. Mr.
Budde commented, "In our efforts to focus on customer service and
in anticipation of growing our same-store funeral calls up to 2
percent in fiscal year 2006, we increased our staffing in funeral
operations during the first quarter. Additionally, as a result of
the 9 percent increase in preneed funeral sales, the investment in
preneed selling costs during the quarter placed some downward
pressure on funeral gross profit, as these preneed selling costs
are expensed as incurred. The increased preneed funeral sales are
deferred into our backlog until the products and services are
delivered." Adjusted earnings from continuing operations increased
$1.7 million to $10.0 million for the first quarter of fiscal 2006
compared to $8.3 million for the first quarter of fiscal 2005,
primarily due to the increase in gross profit. In addition, there
was a decline in interest expense of $2.9 million, which was offset
by an increase in corporate general and administrative expenses.
The increase in corporate general and administrative expenses was
due principally to increased professional fees of $2.3 million.
Increased professional fees resulted primarily from the Company's
Sarbanes-Oxley Section 404 compliance effort, increased legal and
professional fees relating in part to class action lawsuits and the
increased work performed during the first quarter pertaining to SEC
filings and the deferred revenue project. Cash flow from operations
for the first quarter of fiscal 2006 was $27.3 million, and free
cash flow was $23.0 million. (See tables under "Reconciliation of
Non-GAAP Financial Measures.") During the first quarter of fiscal
2005, the Company reported net cash used in operating activities of
$1.9 million, and negative free cash flow of $5.1 million. The
increase in cash flow during the first quarter is due in part to:
1) cash inflows of $11 million for extraordinary trust withdrawals
associated with the deferred revenue project, 2) the timing of
interest payments, and 3) the timing of customer collections. Prior
to the debt refinancing in February 2005, the Company made interest
payments in January and July of each year, or during the Company's
first and third quarters. Upon the refinancing of the senior notes
in February 2005, the Company makes interest payments in February
and August, or during the Company's second and fourth quarters. The
timing of interest payments accounts for approximately $14 million
of the increase in cash flow during the first quarter of 2006.
Additionally, cash flow in the first quarter of 2006 was positively
impacted by an increase in customer collections during the quarter,
following the delay in collections processing during the fourth
quarter of 2005 due to Hurricane Katrina. These increases in cash
flow were partially offset by $2.1 million of cash outflows in
excess of insurance proceeds received related to Hurricane Katrina.
The timing of receipt of insurance proceeds is not in line with the
timing of cash spending related to Hurricane Katrina. As of March
8, 2006, the Company had outstanding debt of $409.1 million and
cash on hand of approximately $70.1 million, or net debt of $339.0
million. Subsequent to the end of the quarter, the Company resumed
its stock repurchase program, and has approximately $21 million
available for future repurchases under its current stock repurchase
program. Mr. Budde concluded, "We are pleased to report these
strong operating and financial results for the first quarter. By
continuing to execute our strategic plan and maintaining our focus
on employees and customers, we are well positioned to deliver
stable, sustainable results over the long-term. We are proud of our
accomplishments and appreciate the confidence and support of our
employees, customers, and shareholders." First Quarter Results From
Continuing Operations FUNERAL -- Funeral revenue increased $2.1
million to $71.8 million, due to an increase in the number of
same-store funeral services performed and an increase in the
average revenue per same-store funeral service performed. --
Including the Louisiana funeral homes affected by Hurricane Katrina
in the comparison of same-store funeral operations, the number of
families served increased 2.4 percent. -- Excluding the Louisiana
funeral homes from the same-store comparison, funeral operations
achieved a 3.3 percent increase in the number of families served.
-- Including the Louisiana funeral homes, the Company's same-store
funeral operations achieved a 4.1 percent increase in the average
revenue per traditional funeral service and a 0.2 percent increase
in the average revenue per cremation service. -- Excluding the
Louisiana funeral homes, same-store funeral operations achieved an
increase of 4.4 percent in average revenue per traditional funeral
service and a 0.9 percent increase in the average revenue per
cremation service. -- The increase in the average revenue per
traditional funeral service was offset by an increase in the
proportion of lower-priced non-traditional funeral services,
including cremations, which experienced a smaller increase in
average revenue than the traditional services, resulting in an
overall increase in the average revenue per funeral service for the
quarter of 1.7 percent excluding the Louisiana funeral homes, or
1.3 percent including the Louisiana funeral homes. -- Including the
Louisiana funeral homes, the cremation rate for the Company's
same-store businesses was 38.7 percent for the first quarter of
2006 compared to 37.0 percent for the first quarter of 2005. -- The
funeral margin decreased 70 basis points to 24.8 percent compared
to 25.5 percent for the same period in 2005, primarily due to an
increase in funeral home staffing levels and an increase in preneed
selling costs. Consistent with the Company's efforts to focus on
customer service and in anticipation of growing same-store funeral
calls up to 2 percent in fiscal year 2006, the Company increased
staffing levels in funeral operations during the first quarter.
Additionally, as a result of the 9 percent increase in preneed
funeral sales, the investment in preneed selling costs during the
quarter placed some downward pressure on funeral gross profit, as
these preneed selling costs are expensed as incurred. The increased
preneed funeral sales are deferred into the backlog until the
products and services are delivered. CEMETERY -- Cemetery revenue
increased $2.0 million to $54.8 million due primarily to the 10
percent increase in cemetery property sales and an increase in
revenue from perpetual care trust earnings, which was offset by a
decrease in revenue associated with the construction of cemetery
projects during the quarter. Revenue related to cemetery property
prior to its construction is recognized on a percentage of
completion method of accounting as construction occurs. -- The
Company realized an annualized average return, excluding unrealized
gains and losses, of 4.9 percent in its perpetual care trust funds
during the first quarter of 2006 compared to 3.8 percent in the
comparable period of 2005. -- The cemetery margin increased 280
basis points to 20.6 percent compared to 17.8 percent for the same
period in 2005, due primarily to the increase in property sales and
perpetual care trust earnings. OTHER -- Corporate general and
administrative expenses increased $3.0 million to $7.2 million due
primarily to increased professional fees of $2.3 million and $0.4
million ($.3 million after tax) in stock option expense as a result
of the implementation of FASB Statement No. 123R "Share-Based
Payment", ("SFAS No. 123R") on November 1, 2005. Based on current
grants, the Company expects to incur approximately $1.7 million in
stock option expense for fiscal year 2006. Increased professional
fees resulted primarily from the Company's Sarbanes-Oxley Section
404 compliance effort, increased legal and professional fees
relating in part to class action lawsuits and the increased work
performed during the first quarter pertaining to SEC filings and
the deferred revenue project. Although the Company expects
professional fees in fiscal year 2006 to be significantly greater
than fiscal year 2005, it does not expect to sustain the level of
professional fees it incurred in the first quarter of 2006. -- The
Company recorded hurricane related charges of $2.6 million ($1.6
million after tax, or $.01 per diluted share) during the quarter,
net of insurance proceeds. The Company believes that a significant
portion of the loss it experienced may be covered by insurance.
When the Company and its insurance carriers agree on the final
amount of the insurance proceeds the Company is entitled to, the
Company will record any related gain at that time. -- Other
operating income, net, increased $0.7 million to $0.9 million
during the first quarter of 2006. The increase was primarily due to
a gain related to the sale of undeveloped cemetery land in the
first quarter of 2006. -- Interest expense decreased $2.9 million
to $7.5 million during the first quarter of 2006 due to a $1.4
million decrease in the average debt outstanding during the quarter
and a 259 basis-point decrease in the average interest rate for the
period. -- During the first quarter of fiscal 2005, the Company
completed the refinancing of its senior secured credit facility,
and recorded a charge for early extinguishment of debt of $2.7
million ($1.7 million after tax, or $.02 per diluted share). -- Due
to the change in the Company's method of accounting for preneed
selling costs related to preneed funeral and cemetery sales,
effective November 1, 2004, the Company no longer amortizes these
costs, but rather expenses them as incurred. In the first quarter
of fiscal 2005, the Company recorded the cumulative effect of a
change in accounting principle of $153.2 million, net of tax, for
the change in accounting for preneed selling costs. -- The
effective tax rate was 36.8 percent in the first quarter of 2006
compared to 34.2 percent in the first quarter of 2005. The
effective tax rate is expected to be approximately 37 percent for
fiscal year 2006. Depreciation and Amortization -- Depreciation and
amortization from continuing operations and total operations was
$5.2 million in the first quarter of 2006 compared to $5.3 million
in the first quarter of 2005. Cash Flow Results and Debt for Total
Operations -- Cash flow from operations for the first quarter of
fiscal 2006 was $27.3 million, and free cash flow was $23.0
million. (See tables under "Reconciliation of Non-GAAP Financial
Measures.") During the first quarter of fiscal 2005, the Company
reported net cash used in operating activities of $1.9 million, and
negative free cash flow of $5.1 million. -- The increase in cash
flow during the first quarter is due in part to: 1) cash inflows of
$11 million for extraordinary trust withdrawals associated with the
deferred revenue project, 2) the timing of interest payments, and
3) the timing of customer collections. Prior to the debt
refinancing in February 2005, the Company made interest payments in
January and July of each year, or during the Company's first and
third quarters. Upon the refinancing of the senior notes in
February 2005, the Company makes interest payments in February and
August, or during the Company's second and fourth quarters. The
timing of interest payments accounts for approximately $14 million
of the increase in cash flow during the first quarter of 2006.
Additionally, cash flow in the first quarter of 2006 was positively
impacted by an increase in customer collections during the quarter,
following the delay in collections processing during the fourth
quarter of 2005 due to Hurricane Katrina. These increases in cash
flow were partially offset by $2.1 million of cash outflows in
excess of insurance proceeds received related to Hurricane Katrina.
The timing of receipt of insurance proceeds is not in line with the
timing of cash spending related to Hurricane Katrina. -- During the
first quarter of 2006, the Company did not repurchase stock due to
the delay in the filing of its SEC reports. Subsequent to the end
of the quarter, the Company resumed its stock repurchase program,
and has approximately $21 million available for future repurchases
under its current stock repurchase program. -- During the first
quarter of 2006, the Company's Board declared, and the Company
paid, $2.7 million in dividends. -- As of March 8, 2006, the
Company had outstanding debt of $409.1 million and cash on hand of
$70.1 million, or net debt of $339.0 million. Trust Performance The
following returns include realized and unrealized gains and losses:
-- For the last twelve months ended January 31, 2006, the Company's
preneed funeral and merchandise trust funds experienced a total
return of 7.4 percent, and its perpetual care trust funds
experienced a total return of 4.1 percent. -- For the twelve months
ended January 31, 2005, the Company's preneed funeral and
merchandise trust funds experienced a total return of 2.7 percent,
and its perpetual care trust funds experienced a total return of
3.7 percent. -- For the last three years ended January 31, 2006,
the Company's preneed funeral and merchandise trust funds
experienced a total return of 10.2 percent, and its perpetual care
trust funds experienced a total return of 8.4 percent. Founded in
1910, Stewart Enterprises is the third largest provider of products
and services in the death care industry in the United States,
currently owning and operating 230 funeral homes and 144
cemeteries. Through its subsidiaries, the Company provides a
complete range of funeral merchandise and services, along with
cemetery property, merchandise and services, both at the time of
need and on a preneed basis. Stewart Enterprises, Inc. will host
its quarterly conference call for investors to discuss first
quarter results today at 10 a.m. Central Standard Time. The
teleconference dial-in number is 800-811-0667. To participate,
please call the number at least 15 minutes prior to the call. If
you are calling from outside the United States, the dial-in number
is 913-981-4901. A replay of the call will be available by dialing
888-203-1112 (from within the continental United States) or
719-457-0820 (from outside the continental United States), and
using pass code 4845999 until March 27, 2006, midnight Central
Standard Time. Interested parties will also have the opportunity to
listen to the live conference call via the Internet through Stewart
Enterprises' website http://www.stewartenterprises.com. To listen
to the live call, please go to the website at least 15 minutes
early to register, download and install any necessary audio
software. A replay will be available at this website shortly
following the conference call and will be available at the website
until April 13, 2006. -0- *T STEWART ENTERPRISES, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(Dollars in thousands, except per share amounts) Three Months Ended
January 31, ---------------------- 2006 2005 ---------- ----------
Revenues: Funeral $ 71,789 $ 69,716 Cemetery 54,816 52,852
---------- ---------- Total revenues 126,605 122,568 ----------
---------- Costs and expenses: Funeral 53,973 51,918 Cemetery
43,553 43,408 ---------- ---------- Total costs and expenses 97,526
95,326 ---------- ---------- Gross profit 29,079 27,242 Corporate
general and administrative expenses (7,219) (4,216) Hurricane
related charges, net (2,638) -- Separation charges (154) -- Gains
on dispositions, net of impairment losses 298 878 Other operating
income, net 978 239 ---------- ---------- Operating earnings 20,344
24,143 Interest expense (7,528) (10,376) Loss on early
extinguishment of debt -- (2,651) Investment and other income, net
468 108 ---------- ---------- Earnings from continuing operations
before income taxes 13,284 11,224 Income taxes 4,895 3,835
---------- ---------- Earnings from continuing operations 8,389
7,389 Discontinued operations: Earnings from discontinued
operations before income taxes -- 530 Income taxes -- 16 ----------
---------- Earnings from discontinued operations -- 514 ----------
---------- Earnings before cumulative effect of change in
accounting principle 8,389 7,903 Cumulative effect of change in
accounting principle (net of $101,061 income tax benefit) --
(153,180) ---------- ---------- Net earnings (loss) $ 8,389
$(145,277) ========== ========== Basic earnings (loss) per common
share: Earnings from continuing operations before cumulative effect
of change in accounting principle $ 0.08 $ 0.07 Earnings from
discontinued operations -- -- Cumulative effect of change in
accounting principle -- (1.40) ---------- ---------- Net earnings
(loss) $ 0.08 $ (1.33) ========== ========== Diluted earnings
(loss) per common share: Earnings from continuing operations before
cumulative effect of change in accounting principle $ 0.08 $ 0.07
Earnings from discontinued operations -- -- Cumulative effect of
change in accounting principle -- (1.40) ---------- ---------- Net
earnings (loss) $ 0.08 $ (1.33) ========== ========== Weighted
average common shares outstanding (in thousands): Basic 108,504
109,087 ========== ========== Diluted 108,522 109,450 ==========
========== Dividends declared per common share $ 0.025 $ --
---------- ---------- Certain reclassifications have been made to
the 2005 consolidated statement of earnings in order for these
periods to be comparable. These reclassifications had no effect on
net earnings. STEWART ENTERPRISES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE PERIODS ENDED
JANUARY 31, 2006 AND 2005 (Unaudited) The Company uses adjusted
EBITDA from continuing operations and free cash flow as financial
measures. These financial measures are not in accordance with
accounting principles generally accepted in the United States of
America ("GAAP") and are intended to supplement, rather than
replace or supersede, any information presented in accordance with
GAAP. The reconciliation of these non-GAAP financial measures to
the most directly comparable GAAP financial measure is presented
below and is also available through Stewart Enterprises' website at
www.stewartenterprises.com in the investor information section.
EBITDA is defined as earnings plus depreciation, amortization,
interest expense and income taxes from continuing operations. In
the first quarter of 2006, the Company recorded hurricane related
charges of $2.6 million, gains on dispositions, net of impairment
losses, of $0.3 million, stock option expense of $0.4 million and
separation charges of $0.2 million, which are included in EBITDA
from continuing operations presented below. In the first quarter of
2005, the Company recorded a charge of $2.7 million for early
extinguishment of debt, and gains on dispositions, net of
impairment losses, of $0.9 million, which are included in EBITDA
from continuing operations presented below. Adjusted EBITDA from
continuing operations, which excludes the items discussed above, is
also provided below. EBITDA margins are calculated by dividing
adjusted EBITDA from continuing operations by revenue from
continuing operations. Management believes that adjusted EBITDA is
a useful measure for providing additional insight into the
Company's operating performance as it eliminates the effects of
certain items that are not comparable from one period to the next.
Management believes that adjusted EBITDA is used by investors and
lenders to compare the Company's performance with prior periods;
the Company's presentation of adjusted EBITDA herein is consistent
with the calculation of adjusted EBITDA as presented by the Company
in the past. Due to the Company's significant cash investment in
preneed activity, management does not view adjusted EBITDA as a
measure of the Company's cash flow. Investors should be aware that
adjusted EBITDA may not be comparable to similarly titled measures
presented by other companies. The following tables provide
reconciliations between net earnings (the GAAP financial measure
that the Company believes is most directly comparable to adjusted
EBITDA) and adjusted EBITDA from continuing operations for the
three months ended January 31, 2006 and 2005: Adjusted EBITDA from
Continuing Operations Three Months Ended ------------------ January
31, ----------- (Dollars in millions) 2006 2005 --------- ---------
Consolidated net earnings (loss) $ 8.4 $ (145.3) Subtract: Earnings
from discontinued operations -- (0.5) Add: Cumulative effect of
change in accounting principle -- 153.2 --------- ---------
Earnings from continuing operations $ 8.4 $ 7.4 Add: Depreciation
from continuing operations 5.2 5.3 Add: Interest expense 7.5 10.4
Add: Income taxes from continuing operations 4.9 3.8 ---------
--------- EBITDA from continuing operations $ 26.0 $ 26.9 Add:
Stock option expense 0.4 -- Add: Separation charges 0.2 --
Subtract: Gains on dispositions, net of impairment losses (0.3)
(0.9) Add: Hurricane related charges, net 2.6 -- Add: Loss on early
extinguishment of debt -- 2.7 --------- --------- Adjusted EBITDA
from continuing operations $ 28.9 $ 28.7 ========= =========
STEWART ENTERPRISES, INC. AND SUBSIDIARIES RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES FOR THE PERIODS ENDED JANUARY 31, 2006
AND 2005 (Unaudited) Free cash flow is defined as net cash provided
by operating activities less maintenance capital expenditures.
Recurring free cash flow is defined as net cash provided by
operating activities less maintenance capital expenditures and
items not expected to recur. Management believes that free cash
flow and recurring free cash flow are useful measures of the
Company's ability to repay debt, make strategic investments,
repurchase stock or pay dividends (subject to the restrictions in
its debt agreements). The following table provides a reconciliation
between net cash provided by (used in) operating activities (the
GAAP financial measure that the Company believes is most directly
comparable to free cash flow and recurring free cash flow) and free
cash flow and between net cash provided by (used in) operating
activities and recurring free cash flow for the three months ended
January 31, 2006 and 2005: Free Cash Flow Three Months Ended
------------------ January 31, ----------- (Dollars in millions)
2006 2005 --------- --------- Net cash provided by (used in)
operating activities $ 27.3 $ (1.9) Less: Maintenance capital
expenditures (4.3) (3.2) --------- --------- Free cash flow $ 23.0
$ (5.1) ========= ========= Net cash provided by (used in)
operating activities $ 27.3 $ (1.9) Less: Extraordinary trust
withdrawals(1) (11.0) -- Add: Cash outflows in excess of insurance
proceeds received related to Hurricane Katrina 2.1 -- ---------
--------- Adjusted cash provided by (used in) operating activities
$ 18.4 $ (1.9) Less: Maintenance capital expenditures (4.3) (3.2)
--------- --------- Recurring free cash flow $ 14.1 $ (5.1)
========= ========= (1) Represents cash inflows for cash withdrawn
from trusts during the deferred revenue project that relates to
services and merchandise delivered in prior periods. STEWART
ENTERPRISES, INC. AND SUBSIDIARIES CAUTIONARY STATEMENTS *T This
press release includes forward-looking statements that are
generally identifiable through the use of words such as "believe,"
"expect," "intend," "plan," "estimate," "anticipate," "project,"
"will" and similar expressions. These forward-looking statements
rely on assumptions, estimates and predictions that could be
inaccurate and that are subject to risks and uncertainties that
could cause actual results to differ materially from our goals or
forecasts. These risks and uncertainties include, but are not
limited to: -- effects of the material weaknesses in our internal
controls over financial reporting; -- the impact of delisting
proceedings by the NASDAQ Stock Market; -- effects of increases in
the interest rate payable on our 6.25 percent senior notes
resulting from the delay in the filing of our SEC reports and the
uncertainty of when the increases will be reduced; -- the effect of
hurricanes on our businesses, including the uncertainty of the
profitability of our Louisiana businesses in the future and the
amount and timing of any potential additional insurance recoveries;
-- effects on earnings and cash flow of increased costs; -- effects
of changes in the number of deaths in our markets on revenues; --
our ability to respond effectively to changing consumer
preferences; -- effects on our trust fund and escrow accounts of
changes in stock and bond prices and interest and dividend rates;
-- effects on cash flow as a result of preneed sales; effects on
our market share, prices, revenues and margins of intensified price
competition or improved advertising and marketing by competitors,
including low-cost casket providers and increased offerings of
products or services over the Internet; -- effects on preneed sales
of changes made to contract terms, sales force compensation, or a
weakening economy; -- our ability to generate sufficient cash to
service our debt and effects of increases in interest rates on our
variable-rate long-term debt; -- effects of covenant restrictions
under our senior secured credit facility on our flexibility in
operating our business; -- our ability to pay future dividends on
our common stock; -- outcomes and effects of pending lawsuits and
proceedings against us; -- effects of changes in accounting
principles on our reported results; -- effects of increasing
numbers of cremations on our revenues and market share; -- effects
of changes in revenue on our cash flow and profits; -- effects of
regulatory and legal changes on our costs and cash flow; and other
risks and uncertainties described in our Form 10-K for the
year-ended October 31, 2005 and our other filings with the SEC. We
disclaim any obligation or intent to update or revise any
forward-looking statements in order to reflect events or
circumstances after the date of this release.
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