Monday, cemetery and funeral home business operator Stonemor Partners LP (STON) reported a more than 50% drop in second-quarter net income compared to year-ago period due to higher interest expense and lower operating profit, although revenues increased 17.9% year over year.
The Levittown, Pennsylvania-based company reported a second quarter net income of $2.23 million or $0.18 per share, down from $4.66 million or $0.54 per share in the corresponding quarter last year. The decrease was attributed to lower operating profit of $5.79 million compared with $7.03 million in the prior-year period and a 50.8% increase in interest expense to $1.1 million.
Adjusted operating profit for the second quarter increased to $11.20 million from $8.70 million in the prior-year period due to a 26.8% increase in total contracts, aided by acquisition, written at an average price increase of 5.3% per contract.
The increase in interest expense was primarily due to an increase in average debt outstanding, the primary use of which was to acquire cemeteries and funeral homes. The backlog reflecting the future operating profit was $185.3 million.
However, total revenues for the quarter increased to $47.94 million from $40.66 million in the corresponding period last year. The increase was attributed to acquisition of 45 cemeteries and 30 funeral homes in December, 2007.
For the six-month period, net income decreased to $2.69 million or $0.22 per share from $4.01 million or $0.46 per share in the year-ago period. However, total revenues increased 28.2% to $91.35 million from $71.20 million last year.
Adjusted operating profit for the six-month ended June 2008 increased to $19.90 million from $15.44 million in the corresponding period last year.
Stonemor is currently trading at $17.99, Up 3.22% or $0.56 on the Nasdaq.
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