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Exhibit 99.1

StoneMor Partners L.P. Announces First Quarter 2012 Results

Levittown, PA, May 9, 2012 – StoneMor Partners L.P. (NYSE: STON) announced its results of operations and various critical financial measures today for the three months ended March 31, 2012. Critical financial measures released include both GAAP measures as provided for in our quarterly financial statements and non-GAAP measures that we believe are relevant to our ability to make cash distributions to common unitholders.

Critical financial measures:

 

     Three months ended
March 31,
 
     2012      2011  
     (In thousands)  

Total revenues (a)

   $ 59,587       $ 49,231   

Production based revenue consisting of the total value of cemetery contracts written, funeral home revenues and investment and other income (b)

     72,268         67,422   

Operating profit (a)

     5,375         1,535   

Adjusted operating profit (b)

     14,755         14,643   

Net income (loss) (a)

     2,030         (7,214

Operating cash flows (a)

     8,190         638   

Adjusted operating cash generated (b)

     14,387         14,853   

Distributable free cash flow generated (b)

   $ 13,820       $ 14,027   

 

     As of      As of  
     March 31, 2012      December 31, 2011  

Distribution coverage quarters (b)

     8.77         8.61   

 

(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.

 

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Overview

“We are very satisfied with our first quarter results”, said Lawrence Miller, President and Chief Executive Officer. “We have increased our production based revenue and total GAAP revenues for the three months ended March 31, 2012. Further, we have increased both our operating profit and adjusted operating profit for the same period and we continue to generate strong distributable free cash flow. In addition, recent changes that we have made to our credit facilities have given us more flexibility and access to capital to pursue acquisitions.” Other highlights from our first quarter are as follows:

 

 

We increased our production by 7.2%, as evidenced by the increase in the total value of cemetery contracts written, funeral home revenues and investment and other income (see “Production Based Revenue”).

 

 

At March 31, 2012, our net accounts receivable of $118.0 million and merchandise trust assets of $355.0 million exceeded our merchandise trust liability of $128.2 million by $344.8 million. As a result, we believe we are adequately funded to meet our future liability to deliver the goods and services that we have sold on a pre-need basis.

 

 

We continue to have a strong ratio of total liquid net assets to our cash distribution. Our distribution coverage (as discussed under “Distribution”) increased to 8.77 at March 31, 2012 compared to 8.61 at December 31, 2011.

 

 

Deferred cemetery revenues increased to $458.3 million at March 31, 2012 compared to $441.9 million at December 31, 2011.

 

 

On January 19, 2012, we amended our credit agreement. As a result, we combined our credit facilities into one revolving credit facility, increased the borrowing commitment by $10.0 million, extended the maturity date to January 19, 2017 and amended the interest rate and certain financial covenants to terms that are more favorable to us.

In addition, in April of 2012 we acquired one cemetery in Illinois for $0.9 million.

 

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Distribution

In April 2012, we announced that for the first quarter of 2012, we declared a distribution of $0.585. We made this decision after evaluating recent operating results, the impact of our capital restructuring, and the effect on our financial position of recent acquisitions. These occurrences led to a substantial buildup in our liquid net asset position as compared to prior periods, which we believe supports our decision to maintain our distribution. Such buildup is shown in the table below:

 

     As of      As of  
     March 31, 2012      December 31, 2011  
     (In thousands)  

Liquid assets:

     

Cash and cash equivalents

   $ 8,778       $ 12,058   

Accounts receivable, net of allowance

     49,370         48,837   

Long-term accounts receivable, net of allowance

     68,634         68,354   

Merchandise trusts, restricted, at fair value

     355,027         344,515   
  

 

 

    

 

 

 

Total liquid assets

     481,809         473,764   
  

 

 

    

 

 

 

Liquid liabilities:

     

Accounts payable and accrued liabilities

     22,332         26,428   

Accrued interest

     5,517         1,632   

Current portion, long-term debt

     2,235         1,487   

Other long-term liabilities

     2,265         2,830   

Long-term debt

     200,891         193,835   

Deferred tax liabilities

     17,001         16,968   

Merchandise liability

     128,220         129,109   
  

 

 

    

 

 

 

Total liquid liabilities

     378,461         372,289   
  

 

 

    

 

 

 

Total liquid net assets

   $ 103,348       $ 101,475   
  

 

 

    

 

 

 

Distribution coverage quarters (a)

     8.77         8.61   

 

(a) This is a measure of the ratio of liquid net assets to a quarterly distribution commitment. The quarterly distribution commitment is calculated by taking the end of the period outstanding common units (19,370,165 at March 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.

Critical Financial Measures

Production Based Revenue (Non-GAAP)

We believe that “Production-based revenues” is the best measure of revenues generated during a period. It is also the revenue measure used by our senior management in evaluating periodic results.

 

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The table below details the components of production based revenue for the three months ended March 31, 2012 and 2011 and reconciles it to GAAP revenues.

 

     Three months ended March 31,     Increase     Increase  
     2012     2011     (Decrease) ($)     (Decrease) (%)  
     (In thousands)  

Value of pre-need cemetery contracts written

   $ 29,842      $ 27,820      $ 2,022        7.3

Value of at-need cemetery contracts written

     20,432        19,645        787        4.0

Investment income from trusts

     9,864        10,290        (426     -4.1

Interest income

     1,938        1,543        395        25.6

Funeral home revenues

     9,273        7,480        1,793        24.0

Other cemetery revenues

     919        644        275        42.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total production based revenues

   $ 72,268      $ 67,422      $ 4,846        7.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Less:

        

Increase in deferred sales revenue and investment income

     (12,681     (18,191     5,510        -30.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total GAAP revenues

   $ 59,587      $ 49,231      $ 10,356        21.0
  

 

 

   

 

 

   

 

 

   

 

 

 

The overall increase in our production based revenues of 7.2% is driven by acquisitions we consummated.

The value of pre-need cemetery contracts written is the revenue source that has the most potential for organic growth. We believe that our ability to increase this revenue source in a soft economy is a testament to both our business plan and the talent of our sales force and bodes well for when the economy improves. The value of at-need cemetery contracts written and funeral home revenues are more dependent upon death rates.

Adjusted Operating Profit and Profit Margin (Non-GAAP)

During a period of growth, operating profits as defined by GAAP will tend to lag adjusted operating profits because accounting rules require the deferral of all revenues and a portion of the costs associated with these revenues until such time that merchandise is delivered or services are performed. This creates a non-cash liability on our financial statements and delays the recognition of revenues and profit. Adjusted operating profits ignore these delays and present results based upon economic performance. Over time, operating profits and adjusted operating profits will match. The ratio of adjusted operating profit to production based revenues is a financial measure that the Company uses to evaluate its performance.

 

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The table below presents adjusted operating profits and reconciles these amounts to GAAP operating profits for the three months ended March 31, 2012 and 2011:

 

     Three months ended March 31,  
     2012     2011  
     (In thousands)  

Operating profit

   $ 5,375      $ 1,535   

Increase in applicable deferred revenues

     12,681        18,191   

Increase in deferred cost of goods sold and selling and obtaining costs

     (3,301     (5,083
  

 

 

   

 

 

 

Adjusted operating profit

   $ 14,755      $ 14,643   
  

 

 

   

 

 

 

Adjusted operating profits increased during the three months ended March 31, 2012 as compared to the same period last year. The main reason for the increase is in revenue growth as we were able to grow our top-line revenues in every category except for investment income from trusts.

Capital Base

As of March 31, 2012, we had $150.0 million of Senior Notes outstanding which are due in 2017 and $51.1 million outstanding on our credit facility. On January 19, 2012, we amended our credit agreement to combine our acquisition and revolving credit facilities into one revolving credit facility. We also increased the borrowing commitment by $10.0 million and extended the maturity date to January 19, 2017. At March 31, 2012, we had an unused line of credit of $78.9 million on our credit facility.

We believe the unused line of credit and our existing debt structure gives us ample flexibility to gain access to capital and pursue acquisition targets. Our capital structure is indicated in the table below:

 

           As of      As of  
           March 31, 2012      December 31, 2011  
           (in thousands)  

Debt on lines of credit

     $ 51,100       $ 43,750   

Debt due within three years

     (a     5,145         4,792   

Debt due between three and five years

       —           —     

Debt due between five and ten years

       150,000         150,000   

Availability under credit lines:

       

Availability under the acquisition line of credit

       —           54,250   

Availability under the revolving line of credit

     $ 78,900       $ 22,000   

 

(a) Debt due within three years includes smaller notes payable related to recent acquisitions.

The combined long and short-term debt on the balance sheet at March 31, 2012 and December 31, 2011 includes an unamortized bond discount of $3,119 and $3,220, respectively, which is not reflected in the table above.

 

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Adjusted Operating Cash Flows and Distributable Free Cash Flow (Non-GAAP)

We define adjusted operating cash flows as operating cash flows plus or (minus):

 

 

Net inflows (outflows) to our merchandise trust.

 

 

Increases (decreases) in accounts receivable and other cash flow timing differences.

We define distributable free cash flow as adjusted operating cash flow plus or (minus):

 

 

Acquisition related costs.

 

 

(Maintenance capital expenditures).

 

 

Other investing cash inflows (outflows).

Our primary source of cash from which to pay partner distributions and make routine capital expenditures is operating cash flow. Over longer periods of time, operating cash flows should exceed the sum of routine capital expenditures and partner distributions. Over shorter periods of time, operating cash flows may be, and usually are, negatively affected by cash flow timing lags created by cash flows into our merchandise trusts (“net trust cash flows”) and changes in accounts receivable and other liquid assets net of liquid liabilities (“float adjustments”). Generally, during periods of growth, we would expect there to be net cash inflows into the trust and increases in accounts receivable.

Because of the timing of certain cash receipts, there will be occasions when we will decide to make a distribution in excess of operating cash flows, adjusted operating cash flows or distributable free cash flows. For the three months ended March 31, 2012, operating cash flows were less than distributions, but adjusted operating cash flows were greater than distributions. Making this type of distribution represents a business decision on our part to not delay partner distributions until such time that cash flow timing issues have been settled. It is our opinion that such a decision is in the best interest of our unitholders. As discussed above in “Distribution”, we believe that we have significant liquidity to support our distribution.

 

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The table below adjusts operating cash flows for the aforementioned timing differences to determine adjusted operating cash flow generated. From this amount, we net out other items to derive distributable free cash flow:

 

     Three months ended March 31,  
     2012     2011  
     (In thousands)  

Operating cash flows

   $ 8,190      $ 638   
  

 

 

   

 

 

 

Add: net cash inflows into the merchandise trust

     2,690        8,612   

Add: net increase in accounts receivable

     1,374        2,835   

Add: net decrease in merchandise liabilities

     2,736        739   

Deduct: net (increase) decrease in accounts payable and accrued expenses

     (1,277     2,510   

Other float related changes

     674        (481
  

 

 

   

 

 

 

Adjusted operating cash flow generated

     14,387        14,853   
  

 

 

   

 

 

 

Less: maintenance capital expenditures

     (898     (1,759

Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a)

     331        933   
  

 

 

   

 

 

 

Distributable free cash flow generated

     13,820        14,027   
  

 

 

   

 

 

 

Cash on hand - beginning of the period

     12,058        7,535   

Distributable cash available during the period

     25,878        21,562   
  

 

 

   

 

 

 

Partner distributions made

   $ 11,780      $ 9,293   
  

 

 

   

 

 

 

 

(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.

For the three months ended March 31, 2012, we experienced a 3.1% decrease in our adjusted operating cash flow and a 1.5 % decrease in our distributable free cash flow. As can be seen in the table above, operating cash flows have been negatively impacted by the buildup in merchandise trust assets and accounts receivable. We consider both distributable free cash flow generated and cash on hand in making our distribution decision. At March 31, 2012, we had $8.8 million in cash on hand. Distributable cash available during the period was greater than distributions by $14.1 million or 119.7% for the three months ended March 31, 2012.

Discussion of GAAP Results

GAAP accounting requires that we defer the value of contracts written and investment income earned from trusts until such time as the underlying merchandise is delivered or the service is performed. Accordingly, periodic changes in GAAP revenue are not necessarily indicative of changes in either the volume or pricing on contracts originated during the period, but rather changes in the timing of when merchandise is delivered or services are performed.

Revenues

Revenues increased by $10.4 million, or 21.0%, to $59.6 million during the three months ended March 31, 2012 from $49.2 million during the three months ended March 31, 2011. Our GAAP revenues for the period have been impacted by timing difference caused by the deferral of certain

 

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revenue items as noted above. Overall, we were able to increase our revenues in every category. Revenue recognized from pre-need and at-need contracts, which is net of deferred amounts, increased by $7.3 million and recognized funeral home revenue increased by $1.6 million. On a non-GAAP basis, investment income from trusts decreased by $0.4 million, but on a GAAP basis, investment income from trusts has increased by $0.7 million as we have met the requirements related to these earnings that allow us to recognize them as revenue. Further, we had an increase in interest and other income of $0.7 million.

Operating Profit

Operating profit increased by $3.9 million, to $5.4 million during the three months ended March 31, 2012 from $1.5 million during the three months ended March 31, 2011. During the three months ended March 31, 2012, we recognized more revenue, and more of the associated costs from our acquisitions, than we did in the comparable periods of the prior year. We typically have greater deferrals in the periods following large acquisitions as we have an increase in sales from our pre-need programs, but do not begin to service and deliver the products sold until later periods. Therefore, the acquisitions that we made during 2010 and 2011 contributed less to the results of the three months ended March 31, 2011, than they did to the three months ended March 31, 2012. Other factors contributing to the increase in operating profit include an increase in investment income from trusts and a decrease in acquisition related costs.

Net Income (Loss)

The table below breaks out significant changes to net income (loss) for the three months ended March 31, 2012 compared to the same period during 2011:

 

     Three months ended March 31,  
     2012      2011  
     (in thousands)  

Operating profit

   $ 5,375       $ 1,535   
  

 

 

    

 

 

 

Expenses related to refinancing

     —           453   

Gain on termination of operating agreement

     1,820         —     

Early extinguishment of debt

     —           4,010   

Interest expense

     4,966         5,090   
  

 

 

    

 

 

 

Net income (loss) before income taxes

     2,229         (8,018
  

 

 

    

 

 

 

Total income tax expense (benefit)

     199         (804
  

 

 

    

 

 

 

Net income (loss)

   $ 2,030       $ (7,214
  

 

 

    

 

 

 

 

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The overall net income for the three months ended March 31, 2012 compared to the net loss for the three months ended March 31, 2011 was primarily related to the aforementioned increase in operating profit and the following:

 

 

A $1.8 million gain related to the termination of an operating agreement.

 

 

The payment of a make-whole premium related to debt extinguishment and refinancing fees aggregating $4.5 million during 2011.

 

 

A $0.1 million decrease in interest expense.

 

 

A $1.0 million decrease in the benefit from income taxes.

Backlog

Backlog is a measurement of the future operating profit benefit that will be derived from customer contracts that have been executed for which we have not as of yet met the GAAP-based revenue recognition criteria and is equal to:

 

 

deferred cemetery revenues and investment income;

 

 

less deferred selling and obtaining costs.

Backlog does not include deferred unrealized gains and losses on merchandise trust assets.

We believe there are no material costs or significant uncertainties remaining to be determined or accrued for us to be able to realize the cash benefit of this future operating profit.

At March 31, 2012, our backlog was $386.5 million. This is an increase of $5.2 million from $381.3 million at December 31, 2011. This build up in backlog relates primarily to business generated at our newly acquired properties and will be reflected in GAAP revenue as we deliver the underlying merchandise and perform the underlying services.

Investor Conference Call

An investors’ conference call to review the first quarter 2012 results will be held on Wednesday, May 9, 2012, at 11:00 a.m. Eastern Time. The conference call can be accessed by calling (800) 410-4177. An audio replay of the conference call will be available by calling (800) 633-8284 through 12:00 a.m. Eastern Time on May 23, 2012. The reservation number for the audio replay is as follows: 21589993. The audio replay of the conference call will also be archived on StoneMor’s website at http://www.stonemor.com.

 

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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 272 cemeteries and 69 funeral homes in 26 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 http://stonemor.com.

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 other filings with the SEC and elsewhere are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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, 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 producing 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. 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.

 

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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 quarter at a level sufficient to pay the minimum 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 is not a measure of financial performance and should not be considered as an alternative to cash flows from operating, investing, or financing activities.

 

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StoneMor Partners L.P.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     March 31,
2012
     December 31,
2011
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 8,778       $ 12,058   

Accounts receivable, net of allowance

     49,370         48,837   

Prepaid expenses

     5,737         4,266   

Other current assets

     15,120         16,336   
  

 

 

    

 

 

 

Total current assets

     79,005         81,497   

Long-term accounts receivable, net of allowance

     68,634         68,354   

Cemetery property

     301,605         298,938   

Property and equipment, net of accumulated depreciation

     73,049         73,777   

Merchandise trusts, restricted, at fair value

     355,027         344,515   

Perpetual care trusts, restricted, at fair value

     267,503         254,679   

Deferred financing costs, net of accumulated amortization

     10,244         8,817   

Deferred selling and obtaining costs

     70,730         68,542   

Deferred tax assets

     417         415   

Goodwill

     36,639         36,439   

Other assets

     12,108         13,152   
  

 

 

    

 

 

 

Total assets

   $ 1,274,961       $ 1,249,125   
  

 

 

    

 

 

 

Liabilities and partners’ capital

     

Current liabilities:

     

Accounts payable and accrued liabilities

   $ 22,332       $ 26,428   

Accrued interest

     5,517         1,632   

Current portion, long-term debt

     2,235         1,487   
  

 

 

    

 

 

 

Total current liabilities

     30,084         29,547   

Other long-term liabilities

     2,265         2,830   

Long-term debt

     200,891         193,835   

Deferred cemetery revenues, net

     458,349         441,878   

Deferred tax liabilities

     17,001         16,968   

Merchandise liability

     128,220         129,109   

Perpetual care trust corpus

     267,503         254,679   
  

 

 

    

 

 

 

Total liabilities

     1,104,313         1,068,846   
  

 

 

    

 

 

 

Commitments and contingencies

     

Partners’ capital

     

General partner

     1,783         2,192   

Common partners

     168,865         178,087   
  

 

 

    

 

 

 

Total partners’ capital

     170,648         180,279   
  

 

 

    

 

 

 

Total liabilities and partners’ capital

   $ 1,274,961       $ 1,249,125   
  

 

 

    

 

 

 

See accompanying notes to the Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended March 31, 2012.

 

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StoneMor Partners L.P.

Condensed Consolidated Statement of Operations

(in thousands, except unit data)

 

     Three months ended March 31,  
     2012      2011  
     (Unaudited)  

Revenues:

     

Cemetery

     

Merchandise

   $ 27,144       $ 21,435   

Services

     12,082         10,798   

Investment and other

     11,424         9,666   

Funeral home

     

Merchandise

     4,018         3,139   

Services

     4,919         4,193   
  

 

 

    

 

 

 

Total revenues

     59,587         49,231   
  

 

 

    

 

 

 

Costs and Expenses:

     

Cost of goods sold (exclusive of depreciation shown separately below):

     

Perpetual care

     1,367         1,325   

Merchandise

     5,053         3,668   

Cemetery expense

     12,792         12,086   

Selling expense

     11,787         9,544   

General and administrative expense

     7,193         6,427   

Corporate overhead (including $198 and $189 in unit-based compensation for the three months ended March 31, 2012 and 2011, respectively)

     6,603         5,958   

Depreciation and amortization

     2,330         2,446   

Funeral home expense

     

Merchandise

     1,423         1,206   

Services

     3,405         2,546   

Other

     1,928         1,557   

Acquisition related costs

     331         933   
  

 

 

    

 

 

 

Total cost and expenses

     54,212         47,696   
  

 

 

    

 

 

 

Operating profit

     5,375         1,535   

Expenses related to refinancing

     —           453   

Gain on termination of operating agreement

     1,820         —     

Early extinguishment of debt

     —           4,010   

Interest expense

     4,966         5,090   
  

 

 

    

 

 

 

Net income (loss) before income taxes

     2,229         (8,018

Income tax expense (benefit)

     

State

     145         4   

Federal

     54         (808
  

 

 

    

 

 

 

Total income tax expense (benefit)

     199         (804
  

 

 

    

 

 

 

Net income (loss)

   $ 2,030       $ (7,214
  

 

 

    

 

 

 

General partner’s interest in net income (loss) for the period

   $ 41       $ (144

Limited partners’ interest in net income (loss) for the period

   $ 1,989       $ (7,070

Net income (loss) per limited partner unit (basic and diluted)

   $ .10       $ (.40

Weighted average number of limited partners’ units outstanding (basic)

     19,369         17,709   

Weighted average number of limited partners’ units outstanding (diluted)

     20,391         17,709   

Distributions declared per unit

   $ .585       $ .585   

See accompanying notes to the Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended March 31, 2012.

 

13


StoneMor Partners L.P.

Condensed Consolidated Statement of Cash Flows

(in thousands)

 

     Three months ended March 31,  
     2012     2011  
     (Unaudited)  

Operating activities:

    

Net income (loss)

   $ 2,030      $ (7,214

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Cost of lots sold

     1,833        1,478   

Depreciation and amortization

     2,330        2,446   

Unit-based compensation

     198        189   

Accretion of debt discount

     436        383   

Gain on termination of operating agreement

     (1,820     —     

Write-off of deferred financing fees

     —          453   

Fees paid related to early extinguishment of debt

     —          4,010   

Changes in assets and liabilities that provided (used) cash:

    

Accounts receivable

     (1,374     (2,835

Allowance for doubtful accounts

     1,363        671   

Merchandise trust fund

     (2,690     (8,612

Prepaid expenses

     (1,471     671   

Other current assets

     1,181        (110

Other assets

     (1,828     197   

Accounts payable and accrued and other liabilities

     1,277        (2,510

Deferred selling and obtaining costs

     (2,188     (3,279

Deferred cemetery revenue

     11,618        16,319   

Deferred taxes (net)

     31        (880

Merchandise liability

     (2,736     (739
  

 

 

   

 

 

 

Net cash provided by operating activities

     8,190        638   
  

 

 

   

 

 

 

Investing activities:

    

Cash paid for cemetery property

     (1,217     (706

Purchase of subsidiaries

     (1,652     (1,700

Cash paid for property and equipment

     (898     (1,759
  

 

 

   

 

 

 

Net cash used in investing activities

     (3,767     (4,165
  

 

 

   

 

 

 

Financing activities:

    

Cash distribution

     (11,780     (9,293

Additional borrowings on long-term debt

     7,350        4,300   

Repayments of long-term debt

     (1,286     (73,317

Proceeds from public offering

     —          103,564   

Proceeds from general partner contribution

     —          2,242   

Fees paid related to early extinguishment of debt

     —          (4,010

Cost of financing activities

     (1,987     —     
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (7,703     23,486   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (3,280     19,959   

Cash and cash equivalents - Beginning of period

     12,058        7,535   
  

 

 

   

 

 

 

Cash and cash equivalents - End of period

   $ 8,778      $ 27,494   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid during the period for interest

   $ 623      $ 1,472   

Cash paid during the period for income taxes

   $ 103      $ 87   

Non-cash investing and financing activities

    

Acquisition of assets by financing

   $ 28      $ —     

See accompanying notes to the Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended March 31, 2012.

 

14