StoneMor Partners L.P. Announces Third Quarter 2013 Financial Results

LEVITTOWN, Pa., Nov. 7, 2013 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE:STON) ("StoneMor") announced its results of operations for the three months ended September 30, 2013. Investors are encouraged to read the Company's quarterly report on Form 10-Q to be filed with the SEC, which contains additional details, as well as financial tables, and can be found at www.stonemor.com.

Financial Highlights

  • Revenues (GAAP) for the three months ended September 30, 2013 were $61.5 million compared to $62.2 million for the three months ended September 30, 2012, a 1.1% decline.
  • Production-based revenue (non-GAAP) for the three months ended September 30, 2013 increased by $5.5 million, or 7.3%, to $80.6 million from $75.1 million during the prior-year period.
  • Operating profits (GAAP) decreased by $4.4 million, or 85.5%, to $0.7 million for the three months ended September 30, 2013, as compared to $5.1 million in the prior-year period.
  • Adjusted operating profits (non-GAAP) increased by $0.6 million, or 4.2%, to $15.2 million for the three-month period ended September 30, 2013 from $14.6 million in the same period last year.
  • Operating cash flows (GAAP) increased by $3.8 million, or 23.0%, to $20.4 million in the three months ended September 30, 2013, as compared to $16.6 million in the prior-year period.
  • Distributable free cash flow (non-GAAP) for the three-month period ended September 30, 2013 decreased to $14.5 million from $15.3 million for the same period last year, a 5.3% decline.
  • Net loss (GAAP) for the three months ended September 30, 2013 was $1.5 million, as compared to net income of $1.1 million in the prior-year period.

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide investors with additional information regarding underlying trends and ongoing results on a comparable basis. Specifically, management believes that production-based revenues and adjusted operating profit allow the investor to gain insight into the current operating performance of the Company. Please see the section of this press release "Non-GAAP Financial Measures" to view the reconciliation tables. Non-GAAP financial measures used by the Company should not be considered as alternatives to GAAP financial measures, and you should not consider such non-GAAP financial measures in isolation or as a substitute for an analysis of the Company's results as reported under U.S. GAAP.

Larry Miller, StoneMor's President and CEO commented, "We are pleased with our third quarter results. The 2012 third quarter results included a land sale of $2.2 million to a private estate and that item impacted quarterly comparisons. Absent this sale, our GAAP revenues would have increased by $1.5 million compared to the third quarter of last year, and our GAAP operating loss would have narrowed considerably. The quarterly comparison of our distributable free cash flow was similarly impacted by this sale.

"We are very happy that production-based revenue and adjusted operating profits both reflected solid gains due to increases in the value of pre-need cemetery contracts written, gains in investment income from trusts and strong funeral home revenues. We believe that production-based revenues and adjusted operating profits are meaningful measures for evaluating our performance because, among other items, they make adjustments for timing related items we referred to previously. They are the measures by which management conducts the company's business and evaluates its performance.

"The funeral home segment in particular continues to perform well. The segment recorded a 17.5% growth in revenues which is the result of acquisitions made during and after the third quarter of 2012. All in all, we view this as a solid quarter, and a very good one from the standpoint of positioning ourselves for future performance.

"With respect to future positioning, the notable element of the quarter was the previously announced operating arrangement with the Archdiocese of Philadelphia. As we have discussed, subject to the satisfaction of closing conditions, this arrangement represents an exciting opportunity for us not only in the cemeteries we will now be managing, but also for the potential that exists for this agreement to become a model for future arrangements with other church owned cemeteries around the nation."

Investor Conference Call and Webcast

StoneMor will conduct a conference call to discuss 2013 third quarter results today, Thursday, November 7, 2013 at 11:00 a.m. EST. The conference call can be accessed by calling (877) 242-2259. An audio replay of the conference call will be available by calling (800) 633-8284 through 1:00 p.m. ET on November 21, 2013. The reservation number for the audio replay is 21682545. A live webcast of the conference call will also be available to investors who may access the call through the investor relations section of www.stonemor.com. An audio replay of the conference call will also be archived on StoneMor's website at www.stonemor.com.

About StoneMor Partners L.P.

StoneMor Partners L.P., headquartered in Levittown, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 277 cemeteries and 90 funeral homes in 28 states and Puerto Rico. StoneMor is the only publicly traded death care company structured as a partnership. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services that provide for the installation of this merchandise.

For additional information about StoneMor Partners L.P., please visit StoneMor's website, and the investor relations section, at http://www.stonemor.com.

Forward-Looking Statements

Certain statements contained in this press release, including, but not limited to, information regarding the status and progress of StoneMor's operating activities, the plans and objectives of its management, assumptions regarding its future performance and plans, and any financial guidance provided, as well as certain information in other filings with the Securities and Exchange Commission and elsewhere, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "project," "expect," "predict," and similar expressions identify these forward-looking statements. These forward-looking statements are made subject to certain risks and uncertainties that could cause StoneMor's actual results to differ materially from those stated or implied by forward-looking statements, including, but not limited to, the following: uncertainties associated with future revenue and revenue growth; the effect of the current economic downturn; the impact of StoneMor's significant leverage on its operating plans; StoneMor's ability to service its debt and pay distributions; the decline in the fair value of certain equity and debt securities held in its trusts; StoneMor's ability to attract, train and retain an adequate number of sales people; uncertainties associated with the volume and timing of pre-need sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in tax accounting and trusting policies; StoneMor's ability to successfully implement a strategic plan relating to achieving operating improvement, strong cash flows and further deleveraging; StoneMor's ability to successfully compete in the cemetery and funeral home industry; uncertainties associated with the integration or the anticipated benefits of StoneMor's recent acquisitions and any future acquisitions; StoneMor's ability to complete and fund additional acquisitions; StoneMor's ability to complete and fund the transaction with the Archdiocese of Philadelphia; litigation or legal proceedings that could expose StoneMor to significant liabilities and damage its reputation; StoneMor's ability to maintain effective disclosure controls and procedures and internal control over financial reporting; the effects of cyber security attacks due to StoneMor's significant reliance on information technology; uncertainties relating to the financial condition of third-party insurance companies that fund StoneMor's pre-need funeral contracts; and various other uncertainties associated with the death care industry and StoneMor's operations in particular.

When considering forward-looking statements, the reader should keep in mind the risk factors and other cautionary statements set forth in StoneMor's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Except as required under applicable law, StoneMor assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by StoneMor, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

Production Based Revenue

We present production based revenue because management believes it provides for a useful measure of both the value of contracts written and investment and other income generated during a given period and is a critical component of adjusted operating profit.

Production based revenue is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Adjusted Operating Profit

We present Adjusted Operating Profit because management believes it provides for a useful measure of economic value added by presenting an effective matching of the value of current and future revenue sources generated within a given period to the cost of producing such revenue and managing our day to day operations within that same period. It is a significant measure that we believe is an indicator of eventual profit generated within a given period of time.

Adjusted Operating Profit is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Adjusted Operating Cash Generated

We present adjusted operating cash generated revenue because management believes it provides for a useful measure of the amount of cash generated that is available to make capital expenditures and partner distributions once all cash flow timing issues have been settled.

Adjusted operating cash generated is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Distributable Free Cash Flow

We present Distributable Free Cash Flow because management believes this information is a useful adjunct to Net Cash Provided by (Used in) Operating Activities under GAAP. Distributable Free Cash Flow is a significant liquidity metric that we believe is an indicator of our ability to generate cash flow during any quarter at a level sufficient to pay the quarterly cash distribution to the holders of our common units and for other purposes, such as repaying debt and expanding through strategic investments.

Distributable Free Cash Flow is similar to quantitative standards of free cash flow used throughout the deathcare industry and to quantitative standards of distributable cash flow used throughout the investment community with respect to publicly traded partnerships, but is not intended to be a prediction of the future. However, our calculation of distributable free cash flow may not be consistent with calculations of free cash flow, distributable cash flow or other similarly titled measures of other companies. Distributable Free Cash Flow should not be used as a substitute for the GAAP measure of cash flows from operating, investing, or financing activities.

Production Based Partners' Capital

We present production based partners' capital as a means to provide better insight into the value that our activities contribute to the enterprise. Because a portion of our revenues and direct selling expenses are not captured on our balance sheet until we deliver the underlying goods or services, we believe that by including these items in our view of partners' capital, we gain better insight into the value creation.

Reconciliation of Production Based Revenue (non-GAAP) and Adjusted Operating Profit (non-GAAP) to Revenue (GAAP) and Operating Profit (GAAP)

Three months ended Three months ended
September 30, 2013 September 30, 2012
(in thousands) (in thousands)
Segment Segment Change in Change in
Results GAAP GAAP Results GAAP GAAP GAAP results GAAP results
(non-GAAP) Adjustments Results (non-GAAP) Adjustments Results ($) (%)
Revenues
Pre-need cemetery revenues $ 34,642 $ (10,124) $ 24,518 $ 32,976 $ (7,211) $ 25,765 $ (1,247) -4.8%
At-need cemetery revenues 19,052 (1,325) 17,727 19,256 (1,218) 18,038 (311) -1.7%
Investment income from trusts 12,411 (6,015) 6,396 9,809 (4,023) 5,786 610 10.5%
Interest income 1,484 -- 1,484 1,238 -- 1,238 246 19.9%
Funeral home revenues 12,094 (1,721) 10,373 9,603 (777) 8,826 1,547 17.5%
Other cemetery revenues 890 151 1,041 2,188 356 2,544 (1,503) -59.1%
Total revenues 80,573 (19,034) 61,539 75,070 (12,873) 62,197 (658) -1.1%
Costs and expenses
Cost of goods sold 8,942 (1,840) 7,102 9,044 (1,398) 7,646 (544) -7.1%
Cemetery expense 14,507 -- 14,507 14,252 -- 14,252 255 1.8%
Selling expense 14,217 (2,525) 11,692 13,156 (1,866) 11,290 402 3.6%
General and administrative expense 7,902 -- 7,902 7,015 -- 7,015 887 12.6%
Corporate overhead 7,997 -- 7,997 6,546 -- 6,546 1,451 22.2%
Depreciation and amortization 2,378 -- 2,378 2,199 -- 2,199 179 8.1%
Funeral home expense 9,161 (180) 8,981 7,161 (65) 7,096 1,885 26.6%
Acquisition related costs, net of recoveries 243 -- 243 1,085 -- 1,085 (842) -77.6%
Total costs and expenses 65,347 (4,545) 60,802 60,458 (3,329) 57,129 3,673 6.4%
Operating profit $ 15,226 $ (14,489) $ 737 $ 14,612 $ (9,544) $ 5,068 $ (4,331) -85.5%
Nine months ended Nine months ended
September 30, 2013 September 30, 2012
(in thousands) (in thousands)
Segment Segment Change in Change in
Results GAAP GAAP Results GAAP GAAP GAAP results GAAP results
(non-GAAP) Adjustments Results (non-GAAP) Adjustments Results ($) (%)
Revenues
Pre-need cemetery revenues $ 102,383 $ (32,513) $ 69,870 $ 96,595 $ (22,936) $ 73,659 $ (3,789) -5.1%
At-need cemetery revenues 60,387 (4,259) 56,128 60,113 (3,198) 56,915 (787) -1.4%
Investment income from trusts 32,916 (15,892) 17,024 30,214 (12,931) 17,283 (259) -1.5%
Interest income 5,209 -- 5,209 4,972 -- 4,972 237 4.8%
Funeral home revenues 36,904 (4,437) 32,467 27,065 (1,447) 25,618 6,849 26.7%
Other cemetery revenues 2,592 283 2,875 3,981 864 4,845 (1,970) -40.7%
Total revenues 240,391 (56,818) 183,573 222,940 (39,648) 183,292 281 0.2%
Costs and expenses
Cost of goods sold 26,841 (5,737) 21,104 25,463 (4,161) 21,302 (198) -0.9%
Cemetery expense 42,700 -- 42,700 41,819 -- 41,819 881 2.1%
Selling expense 43,549 (8,415) 35,134 41,769 (5,569) 36,200 (1,066) -2.9%
General and administrative expense 23,382 -- 23,382 21,403 -- 21,403 1,979 9.2%
Corporate overhead 21,657 -- 21,657 20,905 -- 20,905 752 3.6%
Depreciation and amortization 7,159 -- 7,159 6,759 -- 6,759 400 5.9%
Funeral home expense 27,582 (501) 27,081 20,648 (181) 20,467 6,614 32.3%
Acquisition related costs, net of recoveries 901 -- 901 2,198 -- 2,198 (1,297) -59.0%
Total costs and expenses 193,771 (14,653) 179,118 180,964 (9,911) 171,053 8,065 4.7%
Operating profit $ 46,620 $ (42,165) $ 4,455 $ 41,976 $ (29,737) $ 12,239 $ (7,784) -63.6%

The tables above analyze our results of operations and the changes therein for the three months and nine months ended September 30, 2013, as compared to the same periods last year. The tables are structured so that our readers can determine whether changes were based upon changes in the level of merchandise and services and other revenues generated during the periods and/ or changes in the timing when merchandise and services were delivered.

Critical Financial Measures
Three months ended Nine months ended
September 30, September 30,
2013 2012 2013 2012
(in thousands) (in thousands)
Total revenues (a) $ 61,539 $ 62,197 $ 183,573 $ 183,292
Production based revenue consisting of the total value of cemetery contracts written, funeral home revenues and investment and other income (b) 80,573 75,070 240,391 222,940
Operating profit (a) 737 5,068 4,455 12,239
Adjusted operating profit (b) 15,226 14,612 46,620 41,976
Net income (loss) (a) (1,484) 1,061 (15,493) 922
Operating cash flows (a) 20,413 16,602 36,896 30,797
Adjusted operating cash generated (b) 15,719 15,728 61,502 43,594
Distributable free cash flow generated (b) $ 14,516 $ 15,327 $ 57,037 $ 42,471
As of As of
September 30, 2013 December 31, 2012
Distribution coverage quarters (b) 7.43 6.57
(a) This is a GAAP financial measure.
(b) This is a non-GAAP financial measure as defined by the Securities and Exchange Commission. Please see the reconciliation to GAAP measures or support calculation within this press release.
Reconciliation of Adjusted Operating Profit (non-GAAP) to Operating Profit (GAAP)
Three months ended September 30, Nine months ended September 30,
2013 2012 2013 2012
(in thousands) (in thousands)
GAAP operating profit $ 737 $ 5,068 $ 4,455 $ 12,239
Increase in applicable deferred revenues 19,034 12,873 56,818 39,648
Increase in deferred cost of goods sold and selling and obtaining costs (4,545) (3,329) (14,653) (9,911)
Adjusted operating profit $ 15,226 $ 14,612 $ 46,620 $ 41,976
Reconciliation of Production Based Revenues (non-GAAP) to Revenues (GAAP)
Three months ended September 30, Increase Increase
2013 2012 (Decrease) ($) (Decrease) (%)
(in thousands)
Value of pre-need cemetery contracts written $ 34,642 $ 32,976 $ 1,666 5.1%
Value of at-need cemetery contracts written 19,052 19,256 (204) -1.1%
Investment income from trusts 12,411 9,809 2,602 26.5%
Interest income 1,484 1,238 246 19.9%
Funeral home revenues 12,094 9,603 2,491 25.9%
Other cemetery revenues 890 2,188 (1,298) -59.3%
Total production based revenues $ 80,573 $ 75,070 $ 5,503 7.3%
Less:
Increase in deferred sales revenue and investment income (19,034) (12,873) (6,161) 47.9%
Total GAAP revenues $ 61,539 $ 62,197 $ (658) -1.1%
Reconciliation of Adjusted Operating Cash Flows (non-GAAP) and Distributable Free Cash Flow (Non-GAAP) to Operating Cash Flows (GAAP)
Three months ended
September 30,
Nine months ended
September 30,
2013 2012 2013 2012
(in thousands) (in thousands)
GAAP operating cash flows $ 20,413 $ 16,602 $ 36,896 $ 30,797
Add: net cash inflows into the merchandise trust 1,100 6,260 23,711 8,177
Add net increase (decrease) in accounts receivable (5,051) (5,847) 2,148 2,333
Add: net decrease (increase) in merchandise liabilities (1,075) 1,198 537 5,649
Deduct: net decrease in accounts payable and accrued expenses (4,663) (1,859) (8,340) (2,207)
Other float related changes 4,995 (626) 6,550 (1,155)
Adjusted operating cash flow generated 15,719 15,728 61,502 43,594
Less: maintenance capital expenditures (1,446) (1,486) (5,366) (3,321)
Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a) 243 1,085 901 2,198
Distributable free cash flow generated 14,516 15,327 57,037 42,471
Cash on hand - beginning of the period 14,075 7,787 7,946 12,058
Distributable cash available for the period 28,591 23,114 64,983 54,529
Partner distributions made $ 13,386 $ 11,884 $ 38,653 $ 35,447
(a) We maintain a credit facility from which to make acquisitions and pay acquisition related costs. We utilize this line for these costs. Accordingly, distributable free cash flow is not negatively impacted by amounts spent on acquisitions that are recorded as expenses.
Production Based Partners' Capital
As of As of
September 30, 2013 December 31, 2012
(in thousands)
Partners' Capital $ 124,127 $ 135,182
Deferred selling and obtaining costs (85,201) (76,317)
Deferred cemetery revenues, net 557,973 497,861
Production based partners' capital $ 596,899 $ 556,726
Selected Net Assets
As of As of
September 30, 2013 December 31, 2012
(in thousands)
Selected assets:
Cash and cash equivalents $ 19,984 $ 7,946
Accounts receivable, net of allowance 52,202 51,895
Long-term accounts receivable, net of allowance 76,045 71,521
Merchandise trusts, restricted, at fair value 415,355 375,973
Total selected assets 563,586 507,335
Selected liabilities:
Accounts payable and accrued liabilities 34,191 28,973
Accrued interest 5,134 1,833
Current portion, long-term debt 6,550 2,175
Other long-term liabilities 1,571 1,835
Long-term debt 274,542 252,774
Deferred tax liabilities 12,039 14,910
Merchandise liability 129,922 125,869
Total selected liabilities 463,949 428,369
Total selected net assets $ 99,637 $ 78,966
Distribution coverage quarters (a) 7.43 6.57
(a) This is a measure of the ratio of selected net assets to a quarterly distribution amount. The quarterly distribution amount is calculated by taking the end of the period outstanding common units (21,352,335 at September 30, 2013 and 19,568,448 at December 31, 2012, respectively) and multiplying these units by the declared distribution. This total is then added to the distribution due to the General Partner based upon the same variables.
StoneMor Partners L.P.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
September 30, December 31,
2013 2012
Assets
Current assets:
Cash and cash equivalents $ 19,984 $ 7,946
Accounts receivable, net of allowance 52,202 51,895
Prepaid expenses 5,758 3,832
Other current assets 21,387 17,418
Total current assets 99,331 81,091
Long-term accounts receivable, net of allowance 76,045 71,521
Cemetery property 316,522 309,980
Property and equipment, net of accumulated depreciation 85,282 79,740
Merchandise trusts, restricted, at fair value 415,355 375,973
Perpetual care trusts, restricted, at fair value 302,766 282,313
Deferred financing costs, net of accumulated amortization 8,764 9,238
Deferred selling and obtaining costs 85,201 76,317
Deferred tax assets 69 381
Goodwill 47,570 42,392
Other assets 11,910 14,779
Total assets $ 1,448,815 $ 1,343,725
Liabilities and partners' capital
Current liabilities:
Accounts payable and accrued liabilities $ 34,191 $ 28,973
Accrued interest 5,134 1,833
Current portion, long-term debt 6,550 2,175
Total current liabilities 45,875 32,981
Other long-term liabilities 1,571 1,835
Long-term debt 274,542 252,774
Deferred cemetery revenues, net 557,973 497,861
Deferred tax liabilities 12,039 14,910
Merchandise liability 129,922 125,869
Perpetual care trust corpus 302,766 282,313
Total liabilities 1,324,688 1,208,543
Commitments and contingencies
Partners' capital
General partner (1,495) 386
Common partners 125,622 134,796
Total partners' capital 124,127 135,182
Total liabilities and partners' capital $ 1,448,815 $ 1,343,725

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2013.

StoneMor Partners L.P.
Condensed Consolidated Statement of Operations
(in thousands, except per unit data)
(unaudited)
Three months ended Nine months
ended
September 30, September 30,
2013 2012 2013 2012
Revenues:
Cemetery
Merchandise $ 28,265 $ 29,943 $ 83,586 $ 87,424
Services 11,051 11,134 33,422 34,481
Investment and other 11,850 12,294 34,098 35,769
Funeral home
Merchandise 4,266 3,548 13,736 11,135
Services 6,107 5,278 18,731 14,483
Total revenues 61,539 62,197 183,573 183,292
Costs and Expenses:
Cost of goods sold (exclusive of depreciation shown separately below):
Perpetual care 1,418 1,616 4,199 4,398
Merchandise 5,684 6,030 16,905 16,904
Cemetery expense 14,507 14,252 42,700 41,819
Selling expense 11,692 11,290 35,134 36,200
General and administrative expense 7,902 7,015 23,382 21,403
Corporate overhead (including $348 and $216 in unit-based compensation for the three months ended September 30, 2013 and 2012, and $1,038 and $625 for the nine months ended September 30, 2013 and 2012, respectively) 7,997 6,546 21,657 20,905
Depreciation and amortization 2,378 2,199 7,159 6,759
Funeral home expense
Merchandise 1,573 1,196 4,798 3,726
Services 4,914 3,739 14,239 10,446
Other 2,494 2,161 8,044 6,295
Acquisition related costs, net of recoveries 243 1,085 901 2,198
Total cost and expenses 60,802 57,129 179,118 171,053
Operating profit 737 5,068 4,455 12,239
Gain on acquisitions 2,530 -- 2,530 122
Gain on termination of operating agreement -- -- -- 1,737
Gain on settlement agreement, net -- -- 12,261 --
Gain on sale of other assets -- -- 155 --
Loss on early extinguishment of debt -- -- 21,595 --
Interest expense 5,193 5,273 15,788 15,109
Net loss before income taxes (1,926) (205) (17,982) (1,011)
Income tax benefit (442) (1,266) (2,489) (1,933)
Net income (loss) $ (1,484) $ 1,061 $ (15,493) $ 922
General partner's interest in net income (loss) for the period $ (26) $ 21 $ (284) $ 18
Limited partners' interest in net income (loss) for the period $ (1,458) $ 1,040 $ (15,209) $ 904
Net income (loss) per limited partner unit (basic and diluted) $ (.07) $ .05 $ (.73) $ .05
Weighted average number of limited partners' units outstanding - basic 21,351 19,491 20,814 19,412
Weighted average number of limited partners' units outstanding - diluted 21,351 19,743 20,814 19,672
Distributions declared per unit $ .600 $ .590 $ 1.785 $ 1.760

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2013.

StoneMor Partners L.P.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Three months ended September 30, Nine months ended September 30,
2013 2012 2013 2012
Operating activities:
Net income (loss) $ (1,484) $ 1,061 $ (15,493) $ 922
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cost of lots sold 1,853 2,201 6,047 6,180
Depreciation and amortization 2,378 2,199 7,159 6,759
Unit-based compensation 348 216 1,038 625
Accretion of debt discounts 665 507 1,676 1,230
Gain on termination of operating agreement -- -- -- (1,737)
Gain on acquisitions (2,530) -- (2,530) (122)
Gain on sale of other assets -- -- (155) --
Loss on early extinguishment of debt -- -- 21,595 --
Changes in assets and liabilities that provided (used) cash:
Accounts receivable 5,051 5,847 (2,148) (2,333)
Allowance for doubtful accounts (1,080) 450 (1,163) 3,743
Merchandise trust fund (1,100) (6,260) (23,711) (8,177)
Prepaid expenses (193) 801 (1,926) (368)
Other current assets (2,645) 516 (3,906) (344)
Other assets (399) (14) 3,573 125
Accounts payable and accrued and other liabilities 4,663 1,859 8,340 2,207
Deferred selling and obtaining costs (2,700) (1,983) (8,884) (5,363)
Deferred cemetery revenue 17,415 11,741 51,181 35,440
Deferred taxes (net) (904) (1,341) (3,260) (2,341)
Merchandise liability 1,075 (1,198) (537) (5,649)
Net cash provided by operating activities 20,413 16,602 36,896 30,797
Investing activities:
Cash paid for cemetery property (1,958) (1,817) (4,210) (5,417)
Purchase of subsidiaries (5,000) (22,250) (14,100) (25,676)
Cash paid for property and equipment (1,446) (1,486) (5,366) (3,321)
Proceeds from sales of other assets -- -- 155 --
Net cash used in investing activities (8,404) (25,553) (23,521) (34,414)
Financing activities:
Cash distributions (13,386) (11,884) (38,653) (35,447)
Additional borrowings on long-term debt 19,896 34,300 237,002 63,500
Repayments of long-term debt (12,236) (12,715) (218,036) (26,137)
Proceeds from public offering -- -- 38,377 --
Proceeds from general partner contribution -- 89 -- 89
Fees paid related to early extinguishment of debt -- -- (14,920) --
Cost of financing activities (374) (498) (5,107) (2,318)
Net cash provided by (used in) financing activities (6,100) 9,292 (1,337) (313)
Net increase (decrease) in cash and cash equivalents 5,909 341 12,038 (3,930)
Cash and cash equivalents - Beginning of period 14,075 7,787 7,946 12,058
Cash and cash equivalents - End of period $ 19,984 $ 8,128 $ 19,984 $ 8,128
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 1,002 $ 683 $ 10,756 $ 9,731
Cash paid during the period for income taxes $ 183 $ 323 $ 3,315 $ 3,978
Non-cash investing and financing activities:
Acquisition of assets by financing $ 15 $ 146 $ 107 $ 199
Issuance of limited partner units for cemetery acquisition $ -- $ 3,500 $ 3,718 $ 4,103
Acquisition of assets by assumption of directly related liability $ -- $ 1,504 $ 3,924 $ 2,048

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements on the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2013.

CONTACT: John McNamara (215) 826-2800Source:StoneMor Partners L.P.