HOUSTON, July 28 Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the second quarter 2010. Our unaudited condensed consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results:
Tom Ryan, the Company's President and Chief Executive Officer, commented on the second quarter of 2010:
"We are very pleased with the operating performance of our Company for the second quarter. Earnings and free cash flow exceeded our internal expectations as strong comparable business performance was enhanced by the accretive contribution from the acquisitions of Keystone and Palm Mortuaries. We are also excited about our ability to grow comparable preneed funeral sales production, which increased 23% for the quarter and 17% on a year to date basis. While these sales do not have a material impact on current earnings, they increase our ability to deliver future growth in operating results and enhance shareholder value."
Comparable Funeral Results
The table below details comparable funeral results of operations ("same store") for the three months ended June 30, 2010 and 2009. We consider comparable operations to be those owned for the entire period beginning January 1, 2009 and ending June 30, 2010.
Comparable Cemetery Results
The table below details comparable cemetery results of operations ("same store") for the three months ended June 30, 2010 and 2009. We consider comparable operations to be those owned for the entire period beginning January 1, 2009 and ending June 30, 2010.
Other Financial Results
Cash Flow and Capital Spending
Set forth below is a reconciliation of net cash provided by operating activities excluding special items to our reported net cash provided by operating activities prepared in accordance with GAAP. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
Consistent with our financial objectives, we were successful in prudently managing our capital expenditures during the three and six month periods ended June 30, 2010. The increase in capital spending in 2010 primarily reflects the additional properties owned as a result of the Keystone acquisition. A summary of our capital expenditures is set forth below:
Eric Tanzberger, the Company's Senior Vice President and Chief Financial Officer, commented on the Company's outlook for 2010:
"SCI continues to generate strong cash flow, even during the recent recession and ongoing weak economic times. During 2010 we have had particularly good success with working capital initiatives that have contributed to cash flow, including improved collection rates, especially in our atneed accounts. We now believe that cash flow for the year will be higher than our previous guidance range provided. While our guidance ranges for earnings and capital spending remain unchanged, we do believe that it is more likely we will report earnings in the middle to upper end of the earnings per share range below."
Our outlook for potential earnings and cash flow in 2010 is as follows:
This outlook reflects management's current views and estimates regarding future economic and financial market conditions, company performance and financial results, business prospects, the competitive environment and other events. This outlook is subject to a number of risks and uncertainties, many of which are beyond the control of SCI, that could cause actual results to differ materially from the potential results highlighted above. A further list and description of these risks and uncertainties and other matters can be found later in this press release under "Cautionary Statement on Forward-Looking Statements".
TRUST FUND RETURNS
Total trust fund returns include realized and unrealized gains and losses and dividends. A summary of our consolidated trust fund returns for the three and six months ended June 30, 2010 is set forth below:
NON-GAAP FINANCIAL MEASURES
Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided by operating activities excluding special items shown above are all non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and better reflect the performance of our core operations, as they are not influenced by certain income, expense, and cash items not affecting continuing operations. We also believe these measures help facilitate comparisons to our competitors' operating results.
Set forth below is a reconciliation of earnings from continuing operations excluding special items to our reported net income attributable to common stockholders and diluted earnings per share from continuing operations excluding special items to our GAAP diluted earnings per share. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
Conference Call and Webcast
We will host a conference call on Thursday, July 29, 2010, at 9:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (617) 786-2905 with the passcode of 91118618. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through August 5, 2010 and can be accessed at (617) 801-6888 with the passcode of 70013657. Additionally, a replay of the conference call will be available on our website for approximately ninety days.
Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate" or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following:
For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings included in our 2009 Annual Report on Form 10-K, which was filed February 25, 2010. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as a result of new information, future events or otherwise.
About Service Corporation International
Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of deathcare products and services. At June 30, 2010, we owned and operated 1,412 funeral homes and 382 cemeteries (of which 218 are combination locations) in 44 states, eight Canadian provinces, the District of Columbia and Puerto Rico. Through our businesses, we market the Dignity MemorialŪ brand which offers assurance of quality, value, caring service, and exceptional customer satisfaction. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity MemorialŪ, please visit www.dignitymemorial.com.
(In millions, except for per share amounts) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2010 2009 2010 2009 ---- ---- ---- ---- Revenues $555.3 $513.9 $1,086.1 $1,024.5 Operating income $95.9 $69.1 $181.6 $154.6 Net income attributable to common stockholders $40.3 $23.1 $71.2 $57.6 Diluted earnings per share $.16 $.09 $.28 $.23 Earnings from continuing operations excluding special items(1) $37.7 $30.0 $72.1 $60.9 Diluted earnings per share from continuing operations excluding special items(1) $.15 $.12 $.28 $.24 Diluted weighted average shares outstanding 253.6 251.1 254.9 250.7 Net cash provided by operating activities $77.1 $69.7 $186.0 $211.1 Net cash provided by operating activities excluding special items(1) $78.6 $69.7 $187.5 $211.1 (1) Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided from operating activities are non-GAAP financial measures. A reconciliation to net income, diluted earnings per share, and net cash provided from operating activities computed in accordance with GAAP can be found later in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP Financial Measures".
SOURCE Service Corporation International