Stewart Enterprises: 2009 was a "Doozy": 2010 Will be Much Better
Jefferson funeral services provider Stewart Enterprises was hit hard last year as the number of deaths declined and consumers planning funerals chose less expensive funeral packages. But the company is in a position to take advantage of improvements in the national economy in 2010, after finding ways to increase its cash flow during the year, president and chief executive officer Tom Crawford told investors during Stewart’s annual shareholders meeting Thursday.
“In 2009 we were fighting against headwinds all year,” Crawford said. “It was a doozy of a year we went through.”
High end sales slowed dramatically last year, Crawford said, and Stewart’s cemetery properties struggled as customers gravitated toward less expensive options such as cremation. Stewart is the nation’s second largest funeral services provider.
The operation’s revenue declined 7.6 percent in 2009 to $487.8 million from $527.9 million in 2008. The decline is attributable to both a drop in the sale of funeral merchandise and service trusts as well as a decline in the number of deaths in the markets where Stewart operates.
The company has attempted to make up for those losses by increasing its cash flow, Crawford said. Several fixed assets were turned liquid, for instance. As a result, cash flow from operations climbed to $84.9 million in 2009 from $84.5 million in 2008.
Stewart also reduced its debt to the lowest level in ten years, Crawford said.
While maintaining current operations, the company managed to expand, opening two new funeral homes. Two others are under construction.
Stewart is on track to improve in 2010, Crawford said.
In the first quarter, earnings climbed to $7.5 million, or 8 cents per share. In the same period a year earlier, Stewart Enterprises had net earnings of $4.8 million, or 5 cents a share. The company’s market share also increased in the period.
Crawford said he doesn’t expect such dramatic gains to continue all year long, but does anticipate that the positive growth will continue.
In perhaps a sign of the company’s improvement, Crawford said Stewart is once again eyeing opportunities for acquisition.
“We had laid off on that but we are ready to go there again,” Crawford said.
In other news, Stewart shareholders voted in favor of a stock incentive plan that would award shares of stock as compensation to officers, directors, employees, consultants, and advisors of Stewart.
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