Last week, just a few days after filing their 2Q 2018 financial report StoneMor Partners issued a press release that you can read here pertaining to their 3rd Quarter 2018 performance.
The company continued to report a net loss as they reported a loss of $17.2 million for the quarter and a year to date (9-month) loss of $52.2 million. These numbers represented a widening loss over 2017 year over year results and according to the press release “The increased losses were driven larely by the unfavorable comparisons perviously mentioned and lower overall sales resulting from the impact of cost cutting and implementation of the gneral manager operating model.”
In the release Joe Redling, StoneMor’s President and Chief Operating Officer stated, “Soon after joining StoneMor in July of 2018, we began to implement changes that we believed lay the foundation for improvements in 2019 and beyond. We established a new operating structure to drive greater accountability, and we executed a comprehensive cost reduction plan, which has continued into 2019. Our third quarter financial results do not yet reflect the benefit of those efforts. . . ”
Funeral Director Daily take: In a press release on February 4 we noticed that StoneMor Partners mentioned the “turnaround” effort. Any time when you are executing a “turnaround” things can look pretty bleak at times.
What we noticed from the latest release is that StoneMor continues to be a predominantly cemetery company. We noticed that about 80% of their revenue comes from the cemetery side of the business. Excluding investment and other income, it appears to us that the company has done about $165 million in revenue on the cemetery side for the first 9 months of 2018 and only about $41 million on the funeral home side.
We also understand from their February 4 press release which you can read here, that the company has done a complete asset review on their approximately 400 properties. According to that release they found that about 1/3 of their properties were “marginally unprofitable in the aggregate”. The question that I, and many other funeral service practitioners, have is the strategy going forward. . . . will StoneMor Partners management try to make those properties profitable going forward or will they put them on the sales block?