Finance

Revenues, operating income pop for StoneMor. . . . 2020 year end report

Foundation Partners why I partnered

In a report issued last week, StoneMor Inc. released its financial results for the 4th Quarter of 2020 and for the full-year of 2020.  Here’s what CEO Joe Redling said in the report that you can read here, “The groundwork that was laid with our transformation initiatives, allowed StoneMor to produce another very strong quarter financially, while weathering the surge in the COVID-19 pandemic. We saw 29% year-over-year revenue growth, driven by a strong sales performance including a 20% increase in pre-need sales production. The revenue growth coupled with the continued focus on our operating initiatives and cost structure resulted in Adjusted EBITDA of $5.5 million in the fourth quarter, an improvement of $16.1 million versus the prior year.” 

StoneMor Inc., the Pennsylvania based operator of cemeteries and funeral homes,  has been in what CEO Redling refers to as a “transformation” from a company where a lot of the initiatives seemed to be going south to a company that now seems to be emerging from that stage into a company that can once again be on solid financial footings.

While a lot of what I might say is speculation, it does appear that the increased deaths in the United States due to the COVID-19 pandemic came at a very opportune time for the cemetery heavy company.  In a key time period when the company needed to show some financial strength, it appears that the financial tailwinds of the pandemic with StoneMor’s cemetery operations and cemetery preneed operations came at the right time.

While the total revenues for StoneMor jumped from $257.2 million in FY2019 to $279.5 in FY2020 (an 8.6% increase) they jumped 28.4% in the 4th Quarter — from $58.3 million to $74.9 million.  Cemetery operating income jumped over $11 million alone in the 4th Quarter — from a loss of $0.6 million in FY2019 to an operating income of $10.9 million in 4Q20.

As we mentioned, the company is a cemetery heavy company. . . owning, according to the release, 313 cemeteries and 80 funeral homes.  For the full year of 2020, StoneMor reported operating income of $40.0 million of which $35.0 million was reported to come from the cemetery segment and $5.0 million from the funeral home segment.  In comparison, FY2019 reported only a total of $12.0 million of operating income.

As part of the “transformation” taking place, StoneMor also reported that they dropped corporate overhead over $15 million dollars during the year.

The company also reported a liquidity update in which they state, that as of December 31, 2020, StoneMor held $60.1 million in cash (about $40 million of that unrestricted) and had $321 million in total debt.

The end of the report included these words from CEO Redling, “With the recent financial success, we are excited about our opportunity for future growth. A great deal of thanks and appreciation to the StoneMor team that has persevered through a difficult environment and
delivered this high level of performance for the company and the communities and families we serve.” 

You can access a power point presentation of StoneMor’s report here.

Disclaimer:  The author of this article holds a stock position in StoneMor Inc.

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