StoneMor Partners, the Pennsylvania operator of funeral homes and cemeteries announced First Quarter 2019 results last week. The company, which is in what CEO Joe Redling says is an “operational reorganization” continues to see revenues lower and losses larger than the comparable quarter one year ago.
For 1Q 2019 revenues amounted to $71.5 million as compared to $77.9 million in 2018. The net loss of the company for 1Q 2019 was $22.5 million as compared to $17.9 million in 1Q 2018.
In a press release from the company that you can read here, CEO Redling states, “Starting in July 2018. . . . .StoneMor took a deep analysis and operational reorganization of the company, with many new initiatives put in place during the fourth quarter. . . These efforts are well underway, but as we have said, it will take time to deliver the desired financial results. . . We expected to see some decline in year over year comparisons.”
Redling continued, “We believe that there is significant value embedded in our asset base. . . .So, we created a plan to drive operation and financial improvement in Tier 1 and Tier 2 properties by prioritizing resources to optimize their performance. At the same time we are taking a more strategic approach to Tier 3 properties, where the goal is to minimize the cost impact of these properties, and, if appropriate, divest these non-strategic assets.”
Finally, Redling said, ” We continue to work towards aligning our cost structure with our revenues, the refinancing of our credit facility, and converting to a C – corporation.”
Funeral Director Daily take: Redling and his group have had a big task at StoneMor. The company is billed as the 2nd largest funeral and cemetery operator in the United States with 322 cemeteries and 90 funeral homes in 27 states and Puerto Rico.
We think that they are on the right track with divesting non-performing units. Those units may have value to other operators who can fold them into their operations and possibly re-brand them for a winning formula.
If I owned a death care facility near a StoneMor facility now might be the time to see if there is some advantage to acquisition, re-branding, and scaling.