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SERVICE CORPORATION INTERNATIONAL REPORTS STRONGEST QUARTER IN HISTORY

 HOUSTON, April 27 /PRNewswire/ -- Service Corporation International (SCI) (NYSE: SRV) today reported the highest quarterly revenues and earnings ever achieved by the company. For the three months ended March 31, 1993, the company reported earnings of $29.2 million, or $.37 per share on revenues of $224.4 million, before the cumulative effect of an accounting change. On a comparative basis, the pro-forma earnings for the first quarter of last year, similarly determined, would have been an equivalent of $21.2 million, or $.28 per share. Both periods give effect to a three-for-two stock split on June 30, 1992. The 1993 per share results represent a 32 percent increase over the equivalent basis earnings per share for the first quarter of last year.
 The completion of a review of the company's accounting policies has resulted in SCI changing the method by which it recognizes investment income from prearranged funeral trusts, and the timing of its recognition of preneed
cemetery sales. The effect is to defer recognition of all prearranged funeral revenues until the service is performed, whether funded by trust or life insurance proceeds, and to recognize the sale of preneed cemetery goods and services on a "full accrual" basis. Previously, the company deferred a portion of its cemetery revenues until certain collections or other conditions were achieved. The cumulative effect of the accounting change resulted in a net after-tax charge of $2.0 million, or $.03 per share in the first quarter of 1993.
 R. L. Waltrip, chairman of SCI said, "Under the new accounting policies, the company's results will be reported in a more simplified manner. The results reported in our first quarter of 1993 establish performance records with and without the accounting policy revisions."
 Last year, SCI reported first quarter revenues of $200.7 million, net income of $25.2 million and earnings per share of $.33, after the effect of the stock split. Had the company continued its previous policies, first quarter 1993 prearranged funeral trust income amounting to $12.0 million would have been recognized currently. Preneed cemetery sales revenues of $4.9 million would have been deferred. Including the effect of other less significant adjustments, total revenues would have been $228.5 million, resulting in pro-forma net income of $32.6 million, or $.41 per share, a 24 percent increase.
 Under SCI's new accounting policies, all prearranged funeral sales contracts where the company has an obligation to perform the service would be reflected in the balance sheet as a long-term asset with a corresponding credit to deferred revenue. This change has no effect on the existing policy of recognizing revenue when the funeral service is performed. Additionally, trust earnings previously recognized in those states that allow retention by the funeral home upon contract fulfillment or cancellation, would be deferred until the service is performed. Increasing benefits under insurance-funded contracts would be accrued and deferred until the service is performed. Finally, preneed sales of cemetery interment rights and other products would be recognized on the full accrual method. Allowances for cancellations and refunds would be provided for at date of sale, based on historical collection experience.
 Applying these revised revenue recognition policies to the first quarter of 1992 on a pro forma basis would reduce previously reported funeral service revenues by $8.4 million and increase cemetery revenues by $1.8 million. Likewise, funeral service operating profits and margin percentages would be reduced while cemetery profits and margins would increase. On a comparative basis, with the revised policies applied to both 1993 and 1992 quarters, total revenues would have increased by $30.2 million, or 16 percent, and income from operations (after general and administrative expense) would show growth of $14.8 million, a 32 percent increase. Income before the cumulative effect of the accounting change would have increased $8 million, a 38 percent increase.
 Waltrip added, "Our cemetery accounting policies were adopted in the late 1970's. The cemetery industry has changed over the years, expanding preneed sales beyond lots and crypts to merchandise and services. The industry has adjusted its revenue recognition policies to more accurately reflect the economics of a complete cemetery sale of goods and services. We have now changed our accounting practices to reflect the results of cemetery operations more consistently with the rest of the industry."
 At the end of the first quarter, Service Corporation International, the world's largest funeral service organization, owned and operated 682 funeral homes and 174 cemeteries in 39 states, the District of Columbia and four Canadian provinces. SCI's common stock is traded on the New York Stock Exchange. The company's ticker symbol is SRV.
 SERVICE CORPORATION INTERNATIONAL
 Consolidated Statement of Income
 (Thousands, except per share amounts)
 Three Months Ended March 31 Pro forma(B) As Reported
 1993 1992 1992
 Revenues:
 Funeral $153,812 $137,532 $145,884
 Cemetery 67,020 54,393 52,607
 Financial services 3,539 2,255 2,255
 Total 224,371 194,180 200,746
 Cost and expenses:
 Funeral 103,446 95,695 95,845
 Cemetery 47,601 39,547 39,623
 Financial services 1,853 1,578 1,578
 Total 152,900 136,820 137,046
 Total 71,471 57,360 63,700
 General and administrative
 expense (9,890) (10,577) (10,577)
 Income from operations 61,581 46,783 53,123
 Interest expense (14,581) (13,285) (13,285)
 Income from corporate
 investments 1,012 906 906
 Loss from dispositions (64) (174) (174)
 Total (13,633) (12,553) (12,553)
 Income before income taxes 47,948 34,230 40,570
 Provision for
 income taxes (18,700) (13,000) (15,400)
 Income before cumulative
 effect of change in
 accounting principles 29,248 21,230 25,170
 Cumulative effect of
 change in accounting
 principles (net of tax) (2,031) -- --
 Net income $ 27,217 $ 21,230 $ 25,170
 Weighted average number
 of common shares(A) 79,930 76,755 76,755
 Earnings per share(A):
 Income before cumulative
 effect of change in
 accounting principles $ .37 $ .28 $ .33
 Cumulative effect of
 change in accounting
 principles (.03) -- --
 Net income $ .34 $ .28 $ .33
 (A) -- Adjusted for 3 for 2 stock split on June 30, 1992.
 (B) -- To give effect to the changes in accounting principles for prearranged funeral services and sales of cemetery interments and other products effective Jan. 1, 1993. This presents the three months ended March 31, 1992 as if such accounting changes had been adopted Dec. 31, 1991.
 -0- 4/27/93
 /CONTACT: Bill Barrett, 713-525-5497, or George Champagne, 713-525-5546, both of Service Corporation International/
 (SRV)


CO: Service Corporation International ST: Texas IN: SU: ERN

TS -- NY035 -- 1215 04/27/93 10:03 EDT
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Date:Apr 27, 1993
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