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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Service Corp International Inc | NYSE:SCI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.90 | 1.27% | 71.74 | 72.05 | 70.62 | 70.76 | 616,044 | 00:17:59 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) | February 10, 2016 (February 10, 2016) |
Service Corporation International |
(Exact name of registrant as specified in its charter) |
Texas | 1-6402-1 | 74-1488375 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1929 Allen Parkway Houston, Texas | 77019 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (713) 522-5141
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
On February 10, 2016, Service Corporation International issued a press release reporting its financial results for the fourth quarter of 2015. A copy of this press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.
The attached Exhibit 99.1 is not filed, but is furnished to comply with Regulation FD. The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits |
(d) |
The following exhibits are included with this report |
Exhibit No. | Description | ||
99.1 | Press Release, dated February 10, 2016 reporting fourth quarter 2015 financial results |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
February 10, 2016 | Service Corporation International | |
By: | /s/ Eric D. Tanzberger | |
Eric D. Tanzberger | ||
Senior Vice President | ||
Chief Financial Officer and Treasurer |
Service Corporation International Announces Fourth Quarter 2015 Financial Results And Finalizes Outlook For 2016
HOUSTON, Feb. 10, 2016 /PRNewswire/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the fourth quarter 2015. Our consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results:
(In millions, except for per share amounts) |
| Three Months Ended
|
| Twelve Months Ended
| ||||||||||||
|
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||||||
Revenue |
| $ | 769.4 |
|
| $ | 783.4 |
|
| $ | 2,986.4 |
|
| $ | 2,994.0 |
|
Operating income |
| $ | 157.0 |
|
| $ | 220.3 |
|
| $ | 550.3 |
|
| $ | 607.5 |
|
Net income attributable to common stockholders |
| $ | 72.4 |
|
| $ | 87.8 |
|
| $ | 233.8 |
|
| $ | 172.5 |
|
Diluted earnings per share |
| $ | 0.36 |
|
| $ | 0.42 |
|
| $ | 1.14 |
|
| $ | 0.81 |
|
Earnings from continuing operations excluding special items(1) |
| $ | 73.5 |
|
| $ | 77.2 |
|
| $ | 242.2 |
|
| $ | 237.0 |
|
Diluted earnings per share from continuing operations excluding special items(1) |
| $ | 0.37 |
|
| $ | 0.37 |
|
| $ | 1.18 |
|
| $ | 1.11 |
|
Diluted weighted average shares outstanding |
| 200.0 |
|
| 210.5 |
|
| 204.5 |
|
| 214.2 |
| ||||
Net cash provided by operating activities |
| $ | 75.6 |
|
| $ | 61.2 |
|
| $ | 472.2 |
|
| $ | 317.4 |
|
Net cash provided by operating activities excluding special items(1) |
| $ | 89.3 |
|
| $ | 123.3 |
|
| $ | 513.9 |
|
| $ | 508.6 |
|
|
|
(1) | Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided by operating activities excluding special items are non-GAAP financial measures. A reconciliation from net income attributable to common stockholders, diluted earnings per share, and net cash provided by operating activities computed in accordance with generally accepted accounting principles in the United States (GAAP) can be found later in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP Financial Measures". |
Quarterly Highlights:
Tom Ryan, the Company's Chairman and Chief Executive Officer, commented on the fourth quarter of 2015:
"Given the headwinds of lower funeral services performed, negative currency impacts, and the volatility of the financial markets, we are pleased to report earnings and cash flow results that were within our guidance range. Strong cemetery sales production and the impact of our share buybacks during the year were key to accomplishing our financial results. For the year, we reported solid normalized earnings per share as well as better than expected normalized operating cash flows, which allowed us to return an impressive $433 million to shareholders through dividends and share repurchases. Our results could not have been achieved without the hard work and dedication of our entire team, and I thank all 24,000 of them for their efforts and continued focus on delivering extraordinary service to our client families. We will continue to enhance our operating platform as we
drive customer value, grow differentially through preneed sales, leverage our scale, and deploy our capital wisely to deliver value to our shareholders."
OUTLOOK FOR 2016
Our outlook for potential earnings and cash flow in fiscal 2016 is detailed below.
(In millions, except per share amounts) |
| 2016 Outlook |
Diluted earnings per share from continuing operations excluding special items(1) |
| $1.20 to $1.36 |
Net cash provided by operating activities excluding special items(1) |
| $450 to $500 |
Capital improvements at existing facilities and cemetery development expenditures |
| Approximately $150 |
|
|
(1) | Diluted earnings per share from continuing operations excluding special items and Net cash provided by operating activities excluding special items are non-GAAP financial measures. We normally reconcile these non-GAAP financial measures from diluted earnings per share and net cash provided by operating activities; however, diluted earnings per share and net cash provided by operating activities calculated in accordance with GAAP are not currently accessible on a forward-looking basis. Our outlook for 2016 excludes the following because this information is not currently available for 2016: Gains or losses associated with asset divestitures, gains or losses associated with the early extinguishment of debt, potential tax reserve adjustments and IRS settlement payments, acquisition and integration costs, system implementation and transition costs, and potential costs associated with settlements of litigation or the recognition of receivables for insurance recoveries associated with litigation. The foregoing items, especially gains or losses associated with asset divestitures and potential tax reserve adjustments, could materially impact our forward-looking diluted EPS and/or our net cash provided by operating activities calculated in accordance with GAAP, consistent with the historical disclosures found in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP Financial Measures". |
REVIEW OF FINANCIAL RESULTS FOR FOURTH QUARTER AND TWELVE MONTHS OF 2015
Consolidated Segment Results
See definitions of revenue line items in the comparable sections that follow later in this earnings release.
(In millions, except funeral services performed and average revenue per service) | Three Months Ended
|
| Twelve Months Ended
| ||||||||||||
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||||||
Funeral |
|
|
|
|
|
|
| ||||||||
Atneed revenue | $ | 263.6 |
|
| $ | 277.6 |
|
| $ | 1,083.9 |
|
| $ | 1,110.3 |
|
Funeral home matured preneed revenue | 128.1 |
|
| 135.1 |
|
| 532.3 |
|
| 566.6 |
| ||||
Core revenue | 391.7 |
|
| 412.7 |
|
| 1,616.2 |
|
| 1,676.9 |
| ||||
Non-funeral home matured preneed revenue | 5.9 |
|
| 5.7 |
|
| 23.9 |
|
| 21.9 |
| ||||
Recognized preneed revenue | 23.9 |
|
| 20.6 |
|
| 98.1 |
|
| 85.6 |
| ||||
Other revenue | 38.9 |
|
| 34.0 |
|
| 150.6 |
|
| 136.1 |
| ||||
Total revenue | $ | 460.4 |
|
| $ | 473.0 |
|
| $ | 1,888.8 |
|
| $ | 1,920.5 |
|
|
|
|
|
|
|
|
| ||||||||
Gross profit | $ | 90.2 |
|
| $ | 99.9 |
|
| $ | 387.5 |
|
| $ | 409.7 |
|
Gross margin percentage | 19.6 | % |
| 21.1 | % |
| 20.5 | % |
| 21.3 | % | ||||
|
|
|
|
|
|
|
| ||||||||
Funeral services performed | 77,760 |
|
| 80,425 |
|
| 316,913 |
|
| 325,641 |
| ||||
Average revenue per service | $ | 5,114 |
|
| $ | 5,202 |
|
| $ | 5,175 |
|
| $ | 5,217 |
|
|
|
|
|
|
|
|
| ||||||||
Cemetery |
|
|
|
|
|
|
| ||||||||
Atneed revenue | $ | 75.1 |
|
| $ | 79.3 |
|
| $ | 300.7 |
|
| $ | 307.8 |
|
Recognized preneed revenue | 199.3 |
|
| 179.1 |
|
| 660.9 |
|
| 611.4 |
| ||||
Core revenue | 274.4 |
|
| 258.4 |
|
| 961.6 |
|
| 919.2 |
| ||||
Other cemetery revenue | 34.6 |
|
| 52.1 |
|
| 136.0 |
|
| 154.3 |
| ||||
Total revenue | $ | 309.0 |
|
| $ | 310.5 |
|
| $ | 1,097.6 |
|
| $ | 1,073.5 |
|
|
|
|
|
|
|
|
| ||||||||
Gross profit | $ | 97.3 |
|
| $ | 105.5 |
|
| $ | 284.4 |
|
| $ | 266.0 |
|
Gross margin percentage | 31.5 | % |
| 34.0 | % |
| 25.9 | % |
| 24.8 | % |
Comparable Funeral Results
The table below details comparable funeral results of operations ("same store") for the three months ended December 31, 2015 and 2014. We consider comparable operations to be those businesses owned for the entire period beginning January 1, 2014 and ending December 31, 2015.
(Dollars in millions, except average revenue per service and average revenue per contract sold) |
| Three Months Ended December 31, | |||||||||||||
|
| 2015 |
| 2014 |
| $ |
| % | |||||||
Comparable revenue: |
|
|
|
|
|
|
|
| |||||||
Atneed revenue(1) |
| $ | 260.9 |
|
| $ | 274.0 |
|
| $ | (13.1) |
|
| (4.8) | % |
Funeral home matured preneed revenue(2) |
| 127.6 |
|
| 133.5 |
|
| (5.9) |
|
| (4.4) | % | |||
Core revenue(3) |
| 388.5 |
|
| 407.5 |
|
| (19.0) |
|
| (4.7) | % | |||
Non-funeral home matured preneed revenue(4) |
| 5.9 |
|
| 5.7 |
|
| 0.2 |
|
| 3.5 | % | |||
Recognized preneed revenue(5) |
| 23.4 |
|
| 20.2 |
|
| 3.2 |
|
| 15.8 | % | |||
Other revenue(6) |
| 38.6 |
|
| 34.1 |
|
| 4.5 |
|
| 13.2 | % | |||
Total comparable funeral revenue |
| $ | 456.4 |
|
| $ | 467.5 |
|
| $ | (11.1) |
|
| (2.4) | % |
|
|
|
|
|
|
|
|
| |||||||
Comparable gross profit |
| $ | 91.3 |
|
| $ | 100.1 |
|
| $ | (8.8) |
|
| (8.8) | % |
Comparable gross margin percentage |
| 20.0 | % |
| 21.4 | % |
|
|
|
| |||||
|
|
|
|
|
|
|
|
| |||||||
Comparable services performed: |
|
|
|
|
|
|
|
| |||||||
Atneed services performed |
| 47,265 |
|
| 49,570 |
|
| (2,305) |
|
| (4.6) | % | |||
Funeral home matured preneed services performed |
| 22,776 |
|
| 23,520 |
|
| (744) |
|
| (3.2) | % | |||
Total core services performed |
| 70,041 |
|
| 73,090 |
|
| (3,049) |
|
| (4.2) | % | |||
Non-funeral home matured preneed |
| 6,819 |
|
| 6,369 |
|
| 450 |
|
| 7.1 | % | |||
Total comparable services performed |
| 76,860 |
|
| 79,459 |
|
| (2,599) |
|
| (3.3) | % | |||
|
|
|
|
|
|
|
|
| |||||||
Comparable sales average revenue per service: |
|
|
|
|
|
|
|
| |||||||
Atneed |
| $ | 5,520 |
|
| $ | 5,527 |
|
| $ | (7) |
|
| (0.1) | % |
Funeral home matured preneed |
| 5,601 |
|
| 5,678 |
|
| (77) |
|
| (1.4) | % | |||
Total core |
| 5,547 |
|
| 5,575 |
|
| (28) |
|
| (0.5) | % | |||
Non-funeral home matured preneed |
| 862 |
|
| 900 |
|
| (38) |
|
| (4.2) | % | |||
Total comparable average revenue per service |
| $ | 5,131 |
|
| $ | 5,201 |
|
| $ | (70) |
|
| (1.3) | % |
|
|
|
|
|
|
|
|
| |||||||
Total comparable sales average revenue per service, excluding the impact of foreign currency fluctuations |
| $ | 5,261 |
|
| $ | 5,253 |
|
| $ | 8 |
|
| 0.2 | % |
|
|
|
|
|
|
|
|
| |||||||
Comparable preneed sales production: |
|
|
|
|
|
|
|
| |||||||
Total preneed sales |
| $ | 194.4 |
|
| $ | 195.4 |
|
| $ | (1.0) |
|
| (0.5) | % |
Total preneed contracts sold |
| 41,454 |
|
| 41,569 |
|
| (115) |
|
| (0.3) | % | |||
Average revenue per contract sold |
| $ | 4,690 |
|
| $ | 4,700 |
|
| $ | (10) |
|
| (0.2) | % |
Average revenue per contract sold, excluding the impact of foreign currency fluctuations |
| $ | 4,773 |
|
| $ | 4,751 |
|
| $ | 22 |
|
| 0.5 | % |
|
|
(1) | Atneed revenue represents merchandise and services sold and delivered or performed once death has occurred |
|
|
(2) | Funeral home matured preneed revenue represents merchandise and services sold on a preneed contract through one of our funeral homes and delivered or performed once death has occurred |
|
|
(3) | Core revenue represents the sum of merchandise and services sold on an atneed contract or sold by one of our funeral homes on a preneed contract and delivered or performed once death has occurred |
|
|
(4) | Non-funeral home matured preneed revenue represents services sold on a preneed contract through one of our non-funeral home sales channels (e.g. SCI Direct) and performed once death has occurred |
|
|
(5) | Recognized preneed revenue represents merchandise and travel protection sold on a preneed contract and delivered before death has occurred |
|
|
(6) | Other revenue primarily comprises General Agency revenue, which is commissions we receive from third-party insurance companies for life insurance policies sold to preneed customers for the purpose of funding preneed arrangements |
Comparable Cemetery Results
The table below details comparable cemetery results of operations ("same store") for the three months ended December 31, 2015 and 2014. We consider comparable operations to be those businesses owned for the entire period beginning January 1, 2014 and ending December 31, 2015.
(Dollars in millions) |
| Three Months Ended December 31, | |||||||||||||
|
| 2015 |
| 2014 |
| $ |
| % | |||||||
Comparable revenue: |
|
|
|
|
|
|
|
| |||||||
Atneed revenue(1) |
| $ | 73.7 |
|
| $ | 78.3 |
|
| $ | (4.6) |
|
| (5.9) | % |
Recognized preneed revenue(2) |
| 198.1 |
|
| 178.3 |
|
| 19.8 |
|
| 11.1 | % | |||
Core revenue(3) |
| 271.8 |
|
| 256.6 |
|
| 15.2 |
|
| 5.9 | % | |||
Other revenue(4) |
| 34.2 |
|
| 51.4 |
|
| (17.2) |
|
| (33.5) | % | |||
Total comparable revenue |
| $ | 306.0 |
|
| $ | 308.0 |
|
| $ | (2.0) |
|
| (0.6) | % |
|
|
|
|
|
|
|
|
| |||||||
Comparable gross profit |
| $ | 96.5 |
|
| $ | 105.1 |
|
| $ | (8.6) |
|
| (8.2) | % |
Comparable gross margin percentage |
| 31.5 | % |
| 34.1 | % |
|
|
|
| |||||
|
|
|
|
|
|
|
|
| |||||||
Comparable preneed and atneed sales production: |
|
|
|
|
|
|
|
| |||||||
Property |
| $ | 165.5 |
|
| $ | 160.3 |
|
| $ | 5.2 |
|
| 3.2 | % |
Merchandise and services |
| 133.9 |
|
| 123.8 |
|
| 10.1 |
|
| 8.2 | % | |||
Discounts |
| (35.8) |
|
| (30.3) |
|
| (5.5) |
|
| (18.2) | % | |||
Preneed and atneed sales production |
| $ | 263.6 |
|
| $ | 253.8 |
|
| $ | 9.8 |
|
| 3.9 | % |
Recognition rate(5) |
| 103.1 | % |
| 101.1 | % |
|
|
|
|
|
|
(1) | Atneed revenue represents property, merchandise, and services sold and delivered or performed once death has occurred. |
(2) | Recognized preneed revenue represents property, merchandise, and services sold on a preneed contract that have been delivered or performed. |
(3) | Core revenue represents the sum of property, merchandise, and services that have been delivered or performed. |
(4) | Other revenue is primarily related to merchandise and service trust fund income, endowment care trust fund income, royalty income, and interest and finance charges earned from customer receivables on preneed installment contracts. |
(5) | Represents the ratio of current period core revenue recognition stated as a percentage of current period sales production. |
Other Financial Results
General and administrative expenses decreased $9.4 million to $33.5 million in the fourth quarter of 2015 compared to the same period of 2014. The prior year included $4.3 million of costs related to the integration of Stewart and $1.3 million of system integration and other costs. The current quarter included $2.7 million of system integration costs. Excluding these one-time costs, general and administrative expenses decreased $6.5 million over the prior year, which is primarily due to decreases in liabilities associated with our incentive compensation plans.
Cash Flow and Capital Spending
Set forth below is a reconciliation of our reported net cash provided by operating activities prepared in accordance with GAAP to net cash provided by operating activities excluding special items (or sometimes referred to as normalized operating cash flow). We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
(In millions) | Three Months Ended
|
| Twelve Months Ended
| ||||||||||||
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||||||
Net cash provided by operating activities, as reported | $ | 75.6 |
|
| $ | 61.2 |
|
| $ | 472.2 |
|
| $ | 317.4 |
|
Premiums paid on early extinguishment | — |
|
| — |
|
| 6.5 |
|
| 24.8 |
| ||||
Acquisition, integration, and system transition costs | 2.4 |
|
| 7.0 |
|
| 6.6 |
|
| 62.2 |
| ||||
Legal defense fees and other matters | — |
|
| — |
|
| — |
|
| 10.3 |
| ||||
Excess tax benefits from share-based awards | 0.8 |
|
| 9.4 |
|
| 18.1 |
|
| 30.1 |
| ||||
Income tax payments associated with divestitures | — |
|
| 45.7 |
|
| — |
|
| 63.8 |
| ||||
Payments related to tax structure changes | 10.5 |
|
| — |
|
| 10.5 |
|
| — |
| ||||
Net cash provided by operating activities excluding special items | $ | 89.3 |
|
| $ | 123.3 |
|
| $ | 513.9 |
|
| $ | 508.6 |
|
Capital Expenditures (In millions) | Three Months Ended
|
| Twelve Months Ended
| ||||||||||||
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||||||
Capital improvements at existing locations | $ | 20.8 |
|
| $ | 24.2 |
|
| $ | 83.4 |
|
| $ | 74.8 |
|
Development of cemetery property | 21.9 |
|
| 23.4 |
|
| 58.3 |
|
| 57.7 |
| ||||
Construction of new funeral home facilities and other | 3.6 |
|
| 1.7 |
|
| 9.3 |
|
| 12.0 |
| ||||
Total capital expenditures | $ | 46.3 |
|
| $ | 49.3 |
|
| $ | 151.0 |
|
| $ | 144.5 |
|
TRUST FUND RETURNS
Total trust fund returns include realized and unrealized gains and losses and dividends. A summary of our consolidated trust fund returns for the three and twelve months ended December 31, 2015 is set forth below:
|
| Three Months |
| Twelve Months |
Preneed funeral |
| 2.6% |
| (1.5)% |
Preneed cemetery |
| 3.0% |
| (1.0)% |
Cemetery perpetual care |
| 1.0% |
| (0.3)% |
Combined trust funds |
| 2.2% |
| (0.9)% |
NON-GAAP FINANCIAL MEASURES
Earnings from continuing operations excluding special items and diluted earnings per share from continuing operations excluding special items (or sometimes referred to as normalized earnings per share) shown above are non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and better reflect the performance of our core operations, as they are not influenced by certain income or expense items not affecting continuing operations. We also believe these measures help facilitate comparisons to our competitors' operating results.
Set forth below is a reconciliation of our reported net income attributable to common stockholders to earnings from continuing operations excluding special items and our GAAP diluted earnings per share to diluted earnings per share from continuing operations excluding special items. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
(In millions, except diluted EPS) | Three Months Ended December 31, | ||||||||||||||
| 2015 |
| 2014 | ||||||||||||
| Net Income |
| Diluted EPS |
| Net Income |
| Diluted EPS | ||||||||
Net income attributable to common stockholders, as reported | $ | 72.4 |
|
| $ | 0.36 |
|
| $ | 87.8 |
|
| $ | 0.42 |
|
After-tax reconciling items: |
|
|
|
|
|
|
| ||||||||
Impact of gains from divestitures and impairment charges, net | (1.9) |
|
| (0.01) |
|
| (16.9) |
|
| (0.08) |
| ||||
Acquisition, integration, and system transition costs | 1.7 |
|
| 0.01 |
|
| 3.4 |
|
| 0.02 |
| ||||
Tax reserve adjustments and other | 1.3 |
|
| 0.01 |
|
| 2.9 |
|
| 0.01 |
| ||||
Earnings from continuing operations and diluted earnings per share excluding special items | $ | 73.5 |
|
| $ | 0.37 |
|
| $ | 77.2 |
|
| $ | 0.37 |
|
|
|
|
|
|
|
|
| ||||||||
Diluted weighted average shares outstanding (in thousands) |
|
| 199,977 |
|
|
|
| 210,467 |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
(In millions, except diluted EPS) | Twelve Months Ended December 31, | ||||||||||||||
| 2015 |
| 2014 | ||||||||||||
| Net Income |
| Diluted EPS |
| Net Income |
| Diluted EPS | ||||||||
Net income attributable to common stockholders, as reported | $ | 233.8 |
|
| $ | 1.14 |
|
| $ | 172.5 |
|
| $ | 0.81 |
|
After-tax reconciling items: |
|
|
|
|
|
|
| ||||||||
Impact of (gains) losses on divestitures and impairment charges, net | (3.1) |
|
| (0.01) |
|
| 3.2 |
|
| 0.01 |
| ||||
Acquisition, integration, and system transition costs | 4.2 |
|
| 0.02 |
|
| 32.9 |
|
| 0.17 |
| ||||
Losses on early extinguishment of debt, net | 4.3 |
|
| 0.02 |
|
| 18.0 |
|
| 0.08 |
| ||||
Legal defense fees and other matters | — |
|
| — |
|
| 7.3 |
|
| 0.03 |
| ||||
Tax reserve adjustments and other | 3.0 |
|
| 0.01 |
|
| 3.1 |
|
| 0.01 |
| ||||
Earnings from continuing operations and diluted earnings per share excluding special items | $ | 242.2 |
|
| $ | 1.18 |
|
| $ | 237.0 |
|
| $ | 1.11 |
|
|
|
|
|
|
|
|
| ||||||||
Diluted weighted average shares outstanding (in thousands) |
|
| 204,450 |
|
|
|
| 214,200 |
|
Conference Call and Webcast
We will host a conference call on Thursday, February 11, 2016, at 8:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (847) 619-6396 with the passcode of 41644033. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through February 24, 2016 and can be accessed at (630) 652-3042 with the passcode of 41644033#. Additionally, a replay of the conference call will be available on our website for approximately two weeks.
Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate," or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among
others, the following:
For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2015 Annual Report on Form 10-K, which will be filed in the next several days. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. 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.
About Service Corporation International
Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of deathcare products and services. At December 31, 2015, we owned and operated 1,535 funeral homes and 469 cemeteries (of which 262 are combination locations) in 45 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Through our businesses, we market the Dignity Memorial® brand which offers assurance of quality, value, caring service, and exceptional customer satisfaction. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity Memorial®, please visit www.dignitymemorial.com.
For additional information contact: |
|
| ||
|
|
| ||
Investors: |
| Debbie Young - Director / Investor Relations |
| (713) 525-9088 |
Media: |
| Marianne Gooch - Managing Director / Corporate Communications |
| (713) 525-5235 |
SERVICE CORPORATION INTERNATIONAL | |||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
| |||||||||||||||
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||||||
Revenue | $ | 769,383 |
|
| $ | 783,444 |
|
| $ | 2,986,380 |
|
| $ | 2,994,011 |
|
Costs and expenses | (581,942) |
|
| (578,142) |
|
| (2,314,435) |
|
| (2,318,326) |
| ||||
Gross profit | 187,441 |
|
| 205,302 |
|
| 671,945 |
|
| 675,685 |
| ||||
General and administrative expenses | (33,525) |
|
| (42,882) |
|
| (128,188) |
|
| (184,749) |
| ||||
Gains on divestitures and impairment charges, net | 3,119 |
|
| 57,861 |
|
| 6,522 |
|
| 116,613 |
| ||||
Operating income | 157,035 |
|
| 220,281 |
|
| 550,279 |
|
| 607,549 |
| ||||
Interest expense | (43,055) |
|
| (42,892) |
|
| (172,897) |
|
| (177,571) |
| ||||
Losses on early extinguishment of debt, net | — |
|
| — |
|
| (6,918) |
|
| (29,158) |
| ||||
Other (expense) income | (281) |
|
| 202 |
|
| (113) |
|
| 1,780 |
| ||||
Income from continuing operations before income taxes | 113,699 |
|
| 177,591 |
|
| 370,351 |
|
| 402,600 |
| ||||
Provision for income taxes | (41,249) |
|
| (90,982) |
|
| (135,027) |
|
| (225,980) |
| ||||
Income from continuing operations | 72,450 |
|
| 86,609 |
|
| 235,324 |
|
| 176,620 |
| ||||
Net income (loss) from discontinued operations | — |
|
| 1,340 |
|
| (390) |
|
| 2,186 |
| ||||
Net income | $ | 72,450 |
|
| $ | 87,949 |
|
| $ | 234,934 |
|
| $ | 178,806 |
|
Net income attributable to noncontrolling interests | (96) |
|
| (155) |
|
| (1,162) |
|
| (6,337) |
| ||||
Net income attributable to common stockholders | $ | 72,354 |
|
| $ | 87,794 |
|
| $ | 233,772 |
|
| $ | 172,469 |
|
|
|
|
|
|
|
|
| ||||||||
Basic earnings per share | $ | 0.37 |
|
| $ | 0.42 |
|
| $ | 1.17 |
|
| $ | 0.82 |
|
Diluted earnings per share | $ | 0.36 |
|
| $ | 0.42 |
|
| $ | 1.14 |
|
| $ | 0.81 |
|
|
|
|
|
|
|
|
| ||||||||
Basic weighted average number of shares | 196,248 |
|
| 206,977 |
|
| 200,356 |
|
| 210,741 |
| ||||
Diluted weighted average number of shares | 199,977 |
|
| 210,467 |
|
| 204,450 |
|
| 214,200 |
|
SERVICE CORPORATION INTERNATIONAL | |||||||
CONSOLIDATED BALANCE SHEET | |||||||
| |||||||
| December 31, | ||||||
| 2015 |
| 2014 | ||||
| (In thousands, except share amounts) | ||||||
ASSETS |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 134,599 |
|
| $ | 177,335 |
|
Receivables, net | 90,462 |
|
| 109,050 |
| ||
Inventories | 27,835 |
|
| 29,697 |
| ||
Other | 55,513 |
|
| 80,774 |
| ||
Total current assets | 308,409 |
|
| 396,856 |
| ||
Preneed funeral receivables, net and trust investments | 1,760,297 |
|
| 1,843,023 |
| ||
Preneed cemetery receivables, net and trust investments | 2,318,167 |
|
| 2,306,669 |
| ||
Cemetery property | 1,753,015 |
|
| 1,739,216 |
| ||
Property and equipment, net | 1,846,722 |
|
| 1,861,403 |
| ||
Goodwill | 1,796,340 |
|
| 1,810,853 |
| ||
Deferred charges and other assets | 616,511 |
|
| 624,248 |
| ||
Cemetery perpetual care trust investments | 1,319,427 |
|
| 1,341,376 |
| ||
Total assets | $ | 11,718,888 |
|
| $ | 11,923,644 |
|
LIABILITIES & EQUITY |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable and accrued liabilities | $ | 422,842 |
|
| $ | 453,042 |
|
Current maturities of long-term debt | 95,181 |
|
| 90,931 |
| ||
Income taxes payable | 1,373 |
|
| 8,035 |
| ||
Total current liabilities | 519,396 |
|
| 552,008 |
| ||
Long-term debt | 3,071,738 |
|
| 2,963,794 |
| ||
Deferred preneed funeral revenue | 557,897 |
|
| 540,164 |
| ||
Deferred preneed cemetery revenue | 1,120,001 |
|
| 1,062,381 |
| ||
Deferred tax liability | 470,584 |
|
| 448,824 |
| ||
Other liabilities | 496,921 |
|
| 502,553 |
| ||
Deferred preneed receipts held in trust | 2,973,386 |
|
| 3,148,884 |
| ||
Care trusts' corpus | 1,319,564 |
|
| 1,327,658 |
| ||
Commitments and contingencies |
|
|
| ||||
Equity: |
|
|
| ||||
Common stock, $1 per share par value, 500,000,000 shares authorized, 200,859,676 and 205,458,331 shares issued, respectively, and 195,772,876 and 204,866,770 shares outstanding, respectively | 195,773 |
|
| 204,867 |
| ||
Capital in excess of par value | 1,092,106 |
|
| 1,186,304 |
| ||
Accumulated deficit | (109,351) |
|
| (81,859) |
| ||
Accumulated other comprehensive income | 6,164 |
|
| 59,414 |
| ||
Total common stockholders' equity | 1,184,692 |
|
| 1,368,726 |
| ||
Noncontrolling interests | 4,709 |
|
| 8,652 |
| ||
Total equity | 1,189,401 |
|
| 1,377,378 |
| ||
Total liabilities and equity | $ | 11,718,888 |
|
| $ | 11,923,644 |
|
SERVICE CORPORATION INTERNATIONAL | |||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||
| |||||||||||
| Years Ended December 31, | ||||||||||
| 2015 |
| 2014 |
| 2013 | ||||||
|
|
| (In thousands) |
|
| ||||||
Cash flows from operating activities: |
|
|
|
|
| ||||||
Net income | $ | 234,934 |
|
| $ | 178,806 |
|
| $ | 152,588 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||||||
Income (loss) from discontinued operations, net of tax | 390 |
|
| (2,186) |
|
| (406) |
| |||
Losses (gains) on early extinguishment of debt, net | 6,918 |
|
| 29,158 |
|
| (468) |
| |||
Premiums paid on early extinguishment of debt | (6,549) |
|
| (24,804) |
|
| — |
| |||
Depreciation and amortization | 141,456 |
|
| 140,002 |
|
| 122,235 |
| |||
Amortization of intangible assets | 31,459 |
|
| 36,640 |
|
| 21,859 |
| |||
Amortization of cemetery property | 62,407 |
|
| 60,439 |
|
| 48,344 |
| |||
Amortization of loan costs | 9,434 |
|
| 8,825 |
|
| 15,943 |
| |||
Provision for doubtful accounts | 6,083 |
|
| 7,376 |
|
| 7,874 |
| |||
Provision for deferred income taxes | 18,048 |
|
| 129,671 |
|
| 71,708 |
| |||
(Gains) losses on divestitures and impairment charges, net | (6,522) |
|
| (116,613) |
|
| 6,263 |
| |||
Share-based compensation | 13,843 |
|
| 13,127 |
|
| 11,925 |
| |||
Excess tax benefits from share-based awards | (18,123) |
|
| (30,123) |
|
| — |
| |||
Change in assets and liabilities, net of effects from acquisitions and dispositions: |
|
|
|
|
| ||||||
Decrease (increase) in receivables | 464 |
|
| (18,644) |
|
| 11,017 |
| |||
Decrease (increase) in other assets | 2,457 |
|
| (11,013) |
|
| (14,815) |
| |||
Increase (decrease) in payables and other liabilities | 20,567 |
|
| (12,038) |
|
| (1,995) |
| |||
Effect of preneed funeral production and maturities: |
|
|
|
|
| ||||||
Decrease in preneed funeral receivables, net and trust investments | 24,918 |
|
| 30,357 |
|
| 47,648 |
| |||
Increase (decrease) in deferred preneed funeral revenue | 6,199 |
|
| (23,069) |
|
| (9,260) |
| |||
Decrease in deferred preneed receipts held in trust | (52,946) |
|
| (52,869) |
|
| (50,990) |
| |||
Effect of preneed cemetery production and maturities: |
|
|
|
|
| ||||||
Increase in preneed cemetery receivables, net and trust investments | (73,038) |
|
| (43,964) |
|
| (73,626) |
| |||
Increase in deferred preneed cemetery revenue | 60,960 |
|
| 54,049 |
|
| 30,785 |
| |||
Decrease in deferred preneed cemetery receipts held in trust | (11,173) |
|
| (34,664) |
|
| (12,761) |
| |||
Other | — |
|
| (108) |
|
| (27) |
| |||
Net cash provided by operating activities from continuing operations | 472,186 |
|
| 318,355 |
|
| 383,841 |
| |||
Net cash (used in) provided by operating activities from discontinued operations | — |
|
| (1,000) |
|
| 868 |
| |||
Net cash provided by operating activities | 472,186 |
|
| 317,355 |
|
| 384,709 |
| |||
Cash flows from investing activities: |
|
|
|
|
| ||||||
Capital expenditures | (150,986) |
|
| (144,499) |
|
| (112,939) |
| |||
Acquisitions, net of cash acquired | (41,258) |
|
| (15,336) |
|
| (1,057,122) |
| |||
Proceeds from divestitures and sales of property and equipment | 16,772 |
|
| 424,383 |
|
| 13,219 |
| |||
Net withdrawals (deposits) of restricted funds and other | 8,066 |
|
| (12,225) |
|
| 341 |
| |||
Net cash (used in) provided by investing activities from continuing operations | (167,406) |
|
| 252,323 |
|
| (1,156,501) |
| |||
Net cash provided by (used in) investing activities from discontinued operations | 987 |
|
| 4,963 |
|
| (292) |
| |||
Net cash (used in) provided by investing activities | (166,419) |
|
| 257,286 |
|
| (1,156,793) |
| |||
Cash flows from financing activities: |
|
|
|
|
| ||||||
Proceeds from issuance of long-term debt | 446,250 |
|
| 755,000 |
|
| 1,055,000 |
| |||
Debt issuance costs | (6,025) |
|
| (10,500) |
|
| (36,064) |
| |||
Payments of debt | (160,220) |
|
| (230,561) |
|
| (90,466) |
| |||
Early extinguishment of debt | (197,377) |
|
| (762,764) |
|
| (80) |
| |||
Principal payments on capital leases | (28,601) |
|
| (29,380) |
|
| (26,280) |
| |||
Proceeds from exercise of stock options | 31,809 |
|
| 32,376 |
|
| 6,309 |
| |||
Excess tax benefits from share-based awards | 18,123 |
|
| 30,123 |
|
| — |
| |||
Purchase of Company common stock | (345,261) |
|
| (242,874) |
|
| (1,708) |
| |||
Payments of dividends | (87,570) |
|
| (71,517) |
|
| (57,229) |
| |||
|
|
|
|
|
|
|
|
| |||
| Years Ended December 31, | ||||||||||
| 2015 |
| 2014 |
| 2013 | ||||||
|
|
| (In thousands) |
|
| ||||||
Purchase of noncontrolling interest | (2,075) |
|
| (15,000) |
|
| (23,333) |
| |||
Bank overdrafts and other | (7,531) |
|
| 7,130 |
|
| 336 |
| |||
Net cash (used in) provided by financing activities from continued operations | (338,478) |
|
| (537,967) |
|
| 826,485 |
| |||
Net cash used in financing activities from discontinued operations | — |
|
| — |
|
| (1,370) |
| |||
Net cash (used in) provided by financing activities | (338,478) |
|
| (537,967) |
|
| 825,115 |
| |||
Net change in cash of discontinued operations | — |
|
| 1,361 |
|
| 785 |
| |||
Effect of foreign currency | (10,025) |
|
| (2,284) |
|
| (1,001) |
| |||
Net (decrease) increase in cash and cash equivalents | (42,736) |
|
| 35,751 |
|
| 52,815 |
| |||
Cash and cash equivalents at beginning of period | 177,335 |
|
| 141,584 |
|
| 88,769 |
| |||
Cash and cash equivalents at end of period | $ | 134,599 |
|
| $ | 177,335 |
|
| $ | 141,584 |
|
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