StoneMor Inc., the Pennsylvania cemetery/funeral home consolidator and operator reported their 3rd Quarter results for 2021 earlier this week. In a prepared statement, company CEO Joe Redling stated, “The third quarter continued to build on the positive performance trends of the past year and half, with top-line revenue growth of 13.2% and 19.2% for the three and nine months ended September 30, 2021, respectively, when compared with the same periods in 2020.”
Here are some of those positive results as seen by Funeral Director Daily:
- 3Q 2021 Revenue of $82.3 million as compared to 3Q 2020 Revenue of $72.7 million. . . an increase of almost $10 million (13.2%)
- Nine-Months 2021 Revenue of $243.6 million as compared to Nine-Months 2020 Revenue of $204.4 million. an increase of almost $40 million. . . 19.2%
- 9% growth in Cemetery Preneed sales during the 3rd Quarter
- 3Q 2021 Operating Income of $ 4.3 million as compared to 3Q 2020 Operating Income of $2.6 million
- Nine-Month 2021 Cemetery Operating Income of $40.4 million as compared to Nine-Month 2020 Cemetery Operating Income of $24.1 million.
In the Earnings press release which you can access here, CEO Redling made this comment on the future growth of the company, “We are focused on the next phase of our transformation strategy – a commitment to strategic growth. We have $100 million in cash on our balance sheet and access to additional capital, if necessary. That capital, coupled with the operational transformation completed to date, places StoneMor in the right position to execute on this strategy as we move forward.”
Funeral Director Daily take: According to the press release, StoneMor Inc. now operates 300 cemeteries and 69 funeral homes. When they entered their “Transformation process” we expected them to concentrate on what it appears they do best — operate cemeteries. I beleive at one time they operated over 90 funeral homes so you can see that they have divested of some of those on their “transformation journey”.
More conclusive of their “cemetery led” company is that their revenues line up about 70% from Cemetery, about 15% from Funeral Home, and about 15% from “Investment and other”. As they move into what Redling calls “a commitment to strategic growth”, it will be interesting to see if that focuses on cemetery, on funeral home, or is a combination of both.
You are also probably aware that the major stockholder in StoneMor Inc. is Axar Capital Management. Here is a story that Funeral Director Daily published in early October where Axar Capital asked StoneMor management about “pursuing discussions about strategic alternatives” for the company. During the Earnings Call, of which you can read the transcript here, CEO Redling was asked about that situation. Here is his response:
“. . .I think there is no predisposed focus of one direction or another. So, their goal is to work with their advisors to evaluate a number of strategic alternatives that we could consider. So, there’s really not a defined, you know, matter to go after. So, they are going to look at how we can, you know, leverage the results of the business, and think about how we can, you know, really look at this business strategically and how we can do, you know, structure things where it’s better for shareholders. So, it’s really up to the committee to work with their advisors on bringing that back to the board.”
Another question was asked of CEO Redling about the proposed growth or potential acquisitions of StoneMor. Here’s what he had to say on that subject:
“. . . .we definitely want to stay within our footprint. We think — with our general manager structure, we think we could have, you know, quite a bit of operational synergies. We think the market is, you know, very attractive right now. You know, our pipeline looks very strong, so we’re very active in that review. As you mentioned, we kind of just got started on this. So, we’re — there’ll be more to come on this, but we feel really good about the activity we’re seeing.”
Disclaimer: The author of this article holds a stock position in StoneMor Inc.
More news from the world of Death Care:
- The healing process can finally begin: Funeral services delayed by pandemic restrictions now offer loved ones a way forward. Boston Globe (MA)
- Oconomowoc’s Pagenkopf Funeral Home which opened in 1913, is moving to a new building in Summit. Milwaukee Journal Sentinel (WI)
- Pagenkopf Funeral Home website
- Respect for the Body: A response to Archbishop Jackels. National Catholic Register
- Work begins to rebury remains at Oakwood Cemetery. News Video Story. KXAN MBC – Austin (TX)
- CEC cemetery strategy branded “callous” and “ludicrous”. The Nantwich News (Great Britain)
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